Equity markets in India ended lower on Thursday as investors were wary of rising tensions in West Asia and disruption in global oil supplies. Geopolitical tensions and rising crude prices kept investor sentiment weak; however, certain media and auto stocks helped limit losses during the session.
According to TradingView, at around 12:10 PM, the Nifty 50 index was quoting at 23,945.30, lower by 0.21%, whereas the BSE Sensex was at 76,539.97, lower by 0.28%.
Market sentiments have fallen after the Yemen-based Iranian-backed Houthi militia announced attacks on two oil tankers of Saudi Arabia in the Red Sea. It is important to note here that the attack on the ships took place after the UK Maritime Trade Operations (UKMTO) warned of an attack on a commercial vessel off the coast of Saudi Arabia in the Red Sea.
This has increased worries over safety of one of the busiest shipping lanes in the world.
Geopolitical instability pushed crude oil prices higher, so Brent crude stayed near the $ 96-a-barrel level, and WTI crude was priced at more than $88 per barrel, too.
For India, since it imports most of its crude oil requirements, these firmer prices would likely nudge up the import bill, create inflationary pressure, and also trigger a depreciation of the rupee. That mix, in turn, could dampen investors’ appetite for equities, particularly in firms that are dependent on more expensive raw inputs.
Selling was widespread in the market. Profit-booking continued in the banking, financial services, real estate, health care and pharmaceutical segments. Midcap and smallcap indices also closed in the red, almost trapped.
Still, the decline was partially offset by gains in automobile stocks, which extended their recent rally after strong corporate earnings came out. Media shares stayed among the few sectors trading in positive territory during the session, and it did look a bit steadier than the rest.
Market participants are expected to closely monitor developments in the Red Sea and the broader West Asia conflict, along with movements in crude oil prices. Any further escalation in geopolitical tensions or signs of supply disruptions could keep volatility elevated in the coming sessions. At the same time, domestic earnings and global economic data are likely to influence the market’s near-term direction.