Indian equity markets opened lower on Thursday, extending their losses for a third consecutive session as escalating tensions in the Middle East pushed crude oil prices above $110 per barrel and heightened inflation concerns in the world's third-largest oil importer.
At 9.15am IST, the Nifty 50 declined 0.54% to 22,687.75, while the BSE Sensex fell 0.5% to 73,343.3.
Selling was broad-based, with 15 of the 16 major sectoral indices trading lower. The small-cap and mid-cap indices each dropped 1.3%, indicating continued weakness beyond the benchmark stocks.
Brent crude futures rose 1.6% to $110.60 per barrel after fresh attacks in Saudi Arabia by Yemen's Houthi rebels prompted the United States to order some diplomats and their family members to leave its missions in the kingdom. The surge in oil prices has heightened concerns about India's import bill, inflation and the potential impact on corporate costs.
Stocks to watch on Thursday
Eternal, Mahindra & Mahindra Financial Services and Bharat Electronics are among the companies in focus following their latest quarterly results and business updates.
Eternal reported quarterly revenue above market estimates, although its profit fell short of expectations amid higher expenditure on expanding its quick-commerce business, Blinkit. The company expects Blinkit to grow faster from the December quarter, banking on a more stable competitive environment.
Mahindra & Mahindra Financial Services reported higher revenue and profit for the July-September quarter, supported by strong growth in disbursements.
Bharat Electronics, the defence electronics company, announced that it had received additional orders worth ₹1,011 crore since its previous disclosure on October 13.
Jio Platforms IPO draws strong demand
Investors will also monitor developments surrounding Jio Platforms' initial public offering (IPO), which was fully subscribed within a couple of hours of opening on Wednesday.
The $3.2 billion offering has attracted strong institutional demand, making it India's largest public offering. The response to the issue comes as investors weigh opportunities in the primary market against mounting concerns over geopolitical tensions and elevated crude oil prices.
Foreign inflows support the rupee
Provisional exchange data showed that foreign investors purchased Indian shares worth ₹1,022 crore on Wednesday, marking their second session of net buying in three trading sessions.
The rupee is expected to open largely unchanged against the US dollar as traders weigh inflows associated with the Jio Platforms IPO against the risks posed by high crude oil prices.
The Indian currency closed at 94.46 against the dollar on Wednesday, extending its winning streak to eight consecutive sessions.
While foreign investment inflows and the strong response to the Jio Platforms IPO have provided some support, sustained crude oil prices above $110 a barrel remain a concern for the domestic economy and financial markets.