New Delhi: Market benchmark indices Sensex and Nifty drifted lower in early trade on Tuesday as elevated crude oil prices and fresh US-Iran tensions weighed on investors' sentiment.
Growing expectations that the US Federal Reserve could keep monetary policy tighter for longer are also weighing on risk appetite across emerging markets, an expert said.
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The 30-share BSE Sensex declined 121.48 points to 76,835.79 in early trade. The 50-share NSE Nifty dipped 52.6 points to 24,027.80.
Among the 30 Sensex firms, Bajaj Finserv, InterGlobe Aviation, Titan, State Bank of India, Bajaj Finance and Axis Bank were among the major laggards.
ITC, HCL Tech, Bharti Airtel and Infosys were among the winners.
Brent crude, the global oil benchmark, traded 0.76 percent higher at USD 91.22 per barrel.
"Indian equity markets are expected to remain cautious as renewed US-Iran tensions and the resulting rebound in crude oil prices continue to cloud investor sentiment. Adding to the cautious backdrop, growing expectations that the US Federal Reserve could keep monetary policy tighter for longer are weighing on risk appetite across emerging markets," Ponmudi R, CEO of Enrich Money, an online trading and wealth-tech firm, said.
Offsetting some of these external headwinds is the resilience of the domestic economy. India's real GDP expanded 7.8 percent in the first quarter of FY27, comfortably exceeding both the RBI's 7 percent projection and market expectations, he added.
India's economy grew at a faster-than-expected 7.8 percent in the April-June quarter, showing resilience in the face of concerns that the war in Iran and resulting global uncertainty could weigh on domestic economic momentum.
In Asian markets, South Korea's Kospi, Japan's Nikkei 225 index and Hong Kong's Hang Seng index traded lower, while Shanghai's SSE Composite index quoted higher.
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US markets ended lower on Monday.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 7,985.88 crore on Monday, according to exchange data.
On Monday, the Sensex declined 307.24 points, or 0.40 percent, to settle at 76,957.27. The Nifty dropped 95.25 points, or 0.39 percent, to end at 24,080.40.
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