Sensex falls over 200 points, Nifty below 24,450 as oil nears $90/barrel. What lies ahead?

After opening in the green, Indian stocks turned lower on Wednesday as oil prices surged towards $90 a barrel amid heightened geopolitical uncertainty in the Middle East.

At 9.26 am, Sensex dropped over 200 points to trade 78,000, while Nifty 50 drpped below 24,250. Broader markets also remained in the green, with Nifty Smallcap 100 and Nifty Midcap 100 recording marginal gains.

Tech Mahindra, UltraTech Cement, Eternal and Bharat Electronics shares gained nearly 1% to lead gains on Sensex, while Zudio-parent Trent shares fell around 0.6% to lead losses. Among the sectors, Nifty Metal rose more than half a percent to lead gains, while Nifty FMCG fell more than 0.3%.


The overall market breadth was positive, with NSE seeing 1,408 advances and 830 declines, while 173 stocks remained unchanged.

What lies ahead?

The market is defying a breakout on the upside and is moving sideways, said VK Vijayakumar, Chief Investment Strategist at Geojit Investments. He noted that the principal factor restraining a rally is the strengthening Brent crude which has again moved above $89 level. The off and on in the US-Iran skirmishes continues with the latest attack by US military on a Panama-flagged container ship. Iran now appears to be hardening its stance on the opening of the Strait of Hormuz. This might keep crude prices elevated, constraining a rally in the market, according to the analyst.

“On the positive side, India’s growth resilience is getting better. Latest report from the SBI projects the FY27 GDP growth at 8% against the RBI’s 6.7%. This optimism is based on the trends in most leading indicators. If this turns out to be true, corporate earnings for FY27 will be much better-than-expected. This is a bullish factor,” Vijayakumar said, adding that a significant trend in the market is the hyper activity in the mid and small-cap segments where stocks are responding to results and news.


Tech view on Nifty

Technically, Nifty’s undertone remains subdued yesterday below 24,650, said Rajesh Palviya, Head of Research at Axis Direct. He noted that the benchmark index will likely find immediate support at 24,400, followed by 24,250–24,200.

A sustained recovery in crude could, however, trigger renewed buying and push the index towards 24,800, according to the analyst.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)