Mumbai, Sep 1: Indian equity markets traded in a cautious range on Tuesday as rising crude oil prices and higher bond yields weighed on investor sentiment despite stronger-than-expected domestic economic growth.
The Nifty 50 slipped 0.13 per cent to 24,050.25, while the BSE Sensex declined 0.05 per cent to 76,923.88 in early trade.
The cautious mood came as renewed tensions in the Middle East pushed crude oil prices higher, raising concerns about inflation and the outlook for global interest rates. Oil prices rose around 1 per cent to nearly $91.30 a barrel after gaining about 2.5 per cent in the previous session.
Higher global bond yields added to the pressure. The US 10-year Treasury yield climbed to a 20-month high following hawkish signals from the Federal Reserve, while European bond yields also moved higher. India’s benchmark 10-year bond yield approached the 7 per cent level.
Rising yields can make emerging-market assets relatively less attractive to foreign investors and can also increase borrowing costs for companies and consumers.
The pressure was visible across the broader market. Nine of the 16 major sectoral indices traded lower, with the banking index falling around 1 per cent. The Nifty Midcap 100 declined 1.1 per cent, while the Nifty Smallcap 100 slipped 0.3 per cent.
However, India’s strong economic growth provided some support to the market. The country’s economy expanded 7.8 per cent year-on-year in the April-June quarter, supported by stronger investment, manufacturing activity and resilient consumer demand.
The GDP numbers have strengthened expectations about India’s domestic growth outlook, but investors remain cautious about external risks, particularly higher energy costs and global interest-rate uncertainty.
Among individual stocks, ITC gained around 3 per cent after announcing that its technology arm, ITC Infotech, would acquire a 22.1 per cent stake in Happiest Minds Technologies. Happiest Minds shares declined following the announcement.
Tribhovandas Bhimji Zaveri surged 20 per cent after GRT Jewellers agreed to acquire a controlling stake in the jewellery retailer.
Newly listed Milky Mist Dairy also gained more than 7 per cent after reporting an increase in quarterly profit, while Godrej Agrovet rose around 8.5 per cent after receiving a positive brokerage view based on its growth prospects and valuation.
The market is likely to remain sensitive to movements in crude oil, global bond yields and developments in the Middle East in the near term. Investors will also track further economic data and signals from major central banks for clues about the direction of interest rates.
For Indian equities, the combination of strong domestic growth and challenging global conditions presents a mixed picture. While robust economic fundamentals remain supportive, higher oil prices and rising yields could continue to create volatility in the market.
