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Mumbai, February 20:
Indian stock markets opened lower on Friday as rising US-Iran tensions and higher crude oil prices dampened investor sentiment.
The Nifty 50 slipped 47.80 points (-0.19%) to open at 25,406.55. The BSE Sensex fell 225.65 points (-0.27%) to 82,272.49 in early trade.
Market participants adopted a cautious stance amid escalating geopolitical risks and weak global cues.
Geopolitical Concerns Trigger Risk-Off Sentiment
Banking and market expert Ajay Bagga said investors are shifting to a risk-off mode due to heightened tensions between the US and Iran.
Reports suggest Iran’s Supreme Leader Ayatollah Ali Khamenei rejected US demands to halt uranium enrichment. Former US President Donald Trump reportedly warned Tehran of serious consequences if no agreement is reached soon. Increased US military presence in the region has further intensified uncertainty.
Bagga added that fragile investor confidence, following weakness in US markets, has contributed to the cautious outlook.
Brent Crude Crosses USD 70
Rising oil prices added pressure on domestic equities. Brent crude crossed the USD 70 mark and traded around USD 71.82 per barrel.
India, being a major oil importer, faces inflationary risks when crude prices rise. Higher energy costs can widen the trade deficit and weigh on corporate earnings.
Precious metals reflected safe-haven demand:
- Gold remained firm at Rs 1,55,277 per 10 grams (24 karat)
- Silver gained 1.14% to Rs 2,44,113 per kg
Broader Markets Also Decline
Broader indices on the National Stock Exchange of India also traded in the red:
- Nifty 100 fell 0.18%
- Nifty Smallcap 100 declined 0.15%
- Nifty Midcap index dropped 0.24%
VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said the spike in Brent crude reflects growing market fear. He also pointed to weakness in IT stocks as another negative factor.
However, he noted that India’s economic fundamentals remain strong. Improving Q3 corporate earnings provide some support to markets.
Global Markets Mixed
Asian markets showed mixed trends:
- Japan’s Nikkei 225 declined nearly 1%
- Hong Kong’s Hang Seng slipped 0.63%
- Singapore’s Straits Times edged up 0.15%
- South Korea’s index rallied over 1%
US markets closed lower overnight. The S&P 500 dropped 0.28%, while the Nasdaq fell 0.36%, adding to global caution.
Market Outlook
Rising geopolitical tensions, elevated crude prices, and global market weakness continue to influence Indian equities.
Analysts expect volatility to persist in the near term. Investors are likely to monitor developments in West Asia and movements in oil prices closely.
A diplomatic resolution between the US and Iran could ease fears and support a market rebound. Until then, caution may dominate Dalal Street.
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