Key Highlights:

  • Sharp opening losses: Sensex opened nearly 600 points (0.79%) lower at 74,309.16, while Nifty fell 207.50 points (0.88%) to 23,270.30.
  • Metal and Realty lead the fall: Nifty Metal dropped over 3%, followed by Nifty Realty, down more than 2%, as the biggest sectoral decliners.
  • IT bucks the trend: Nifty IT was the only sectoral index in positive territory, trading 0.10% higher.
  • Brent crude surges to $108: Escalating Middle East tensions pushed oil prices sharply higher, raising concerns over inflation and India's economic growth.
  • US bond yields near a key level: The 10-year Treasury yield stood at around 4.96%, approaching the 5% mark widely seen as a tipping point for global equities.
  • IPO market drawing funds away: Heavy oversubscription and listing gains in India's IPO market continue to pull liquidity from the secondary market.

Mumbai: Domestic equity benchmarks opened sharply lower on Friday tracking weak global markets as escalating Middle East tensions pushed oil prices higher and raised concerns over inflation and interest rates.

Sensex started nearly 600 points or 0.79 per cent lower at 74,309.16, while Nifty opened 207.50 points or 0.88 per cent down at 23,270.30.

Sectoral Trends: Metal And Realty Under Pressure

Among sectors, Nifty Metal fell more than 3 per cent, making it the biggest decliner in early deals, followed by Nifty Realty, which lost over 2 per cent.

Consumer durables, financial services, banking, auto and cement sector indices fell up to 1 per cent.

However, Nifty IT was the only sectoral index in positive territory and was trading 0.10 per cent up.

Crude Prices And Bond Yields Weigh On Sentiment

"Headwinds for the market are getting stronger with the escalation in the Middle East conflict. Brent crude has shot up to around $108," according to market experts.

If elevated crude prices sustain or rise further, the impact on India's economic growth and corporate earnings could be significant, they said, adding that rising US bond yields were another major headwind.

The US 10-year Treasury yield was around 4.96 per cent, approaching the 5 per cent level that is widely viewed as a potential inflection point for global equities, according to them.

Understanding Why The 5% Treasury Yield Level Matters: When US Treasury yields rise, US government bonds become a more attractive, safer investment relative to riskier assets like emerging-market stocks. A yield nearing 5% signals that investors can earn a substantial, low-risk return simply by holding US debt — which often triggers a shift of capital away from equity markets worldwide, including India, as investors rebalance toward safer, higher-yielding US assets.

IPO Market Continues To Draw Liquidity

Analysts said the Indian IPO market was currently attracting significant investor interest, with heavy oversubscription and listing gains drawing funds away from the secondary market.

Key Technical Levels

On the technical front, analysts said the Nifty could find the next downside targets at 23,260-23,000, while yesterday's long lower wick suggested that a base formation could be underway, despite weak recovery attempts. The upside marker remains at 23,520.

Investors should remain cautious given the challenging global and domestic environment, the experts said.

Global Cues: Wall Street Selloff

Additionally, Asian markets traded lower after rising oil prices sparked a Wall Street selloff. US stocks closed lower in the last session as stronger producer inflation data and rising oil prices fuelled concerns over another Fed rate hike.

Also Read: Sensex Falls 417 Pts on Oil Fears; Rupee Holds Firm at 94.48