Indian benchmark indices remained under pressure on Monday, with the Nifty 50 falling as much as 0.7% to 23,738.70. The Sensex declined as much as 0.7%, or 535 points, to 75,980.
Three factors are weighing on domestic equities: rising crude oil prices amid escalating US-Iran tensions, expectations of a possible US rate hike and weakness across key sectors.
Oil Rises
Rising crude oil prices continued to weigh on Indian equities. WTI crude moved above $92 a barrel and was trading around those levels, keeping oil prices a key concern for the domestic market, according to Ponmudi R, CEO of Enrich Money.
Ponmudi said the rise in crude was driven by concerns over supply disruptions amid escalating US-Iran tensions and ongoing strikes in the region.
The heightened geopolitical uncertainty has raised concerns over global energy supplies and could keep volatility elevated across equity markets, he said.
MCX crude oil opened 1.5% higher at ₹8,688, while WTI crude opened at $92.26.
Rate Fears
Weak Wall Street cues and expectations of a possible US rate hike are also weighing on market sentiment.
Vikram Kasat, chief business officer, advisory and dealing at PL Capital, said weak Wall Street cues, the fear of a US rate hike and uncertainty in the Middle East could lead to further consolidation in stocks.
"Market is waiting for some strong positive news flows to breakout from a multi week consolidation," Kasat said.
He said investors will watch the Securities and Exchange Board of India's review of CAS closing, the Federal Reserve's meeting outcome and developments in the Middle East over the next few weeks.
Kasat said the preferred outcome would be for the Fed to leave rates unchanged and for some relief on the Middle East front through a restart of peace talks.
Sector Weakness
The pressure has also spread across key sectors. The Media sector fell more than 2.5%, while the IT sector declined more than 1.5%, according to Ponmudi.
The broader weakness across sectors has reinforced the cautious tone in domestic equities.
The Nifty 50 opened marginally below its previous close near 23,883 and remained under pressure. Ponmudi said 24,000 is the immediate resistance level, while 23,800 is the crucial support zone.
A decisive break below 23,800 could intensify selling pressure and expose the index to 23,600, he said. The Nifty's RSI in the mid-30s indicates strengthening bearish momentum and puts the index closer to oversold territory.
The Bank Nifty opened largely flat near 57,343 but continued to face selling pressure at higher levels. Ponmudi identified 57,000 as the key support level and 57,700-57,800 as the immediate resistance zone.
The Indian rupee, meanwhile, remained relatively resilient despite higher crude prices, trading around ₹94.4 per dollar, according to Ponmudi.
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