Sensex falls 278 points, Nifty down 57 as oil prices fuel market caution

Indian benchmark indices declined in early trade on Tuesday as elevated crude oil prices and rising tensions in West Asia weighed on investor sentiment.

The 30-share BSE Sensex fell 278.32 points to 77,450.64, while the 50-share NSE Nifty slipped 57.65 points to 24,230.45.

Airtel, IT stocks among major laggards

From the Sensex pack, Bharti Airtel, Asian Paints, InterGlobe Aviation, Infosys, HCL Tech and Tech Mahindra were among the major losers.

Reliance Industries, Sun Pharma, Maruti and Axis Bank were among the stocks trading higher.

Brent crude, the global oil benchmark, was up 0.63% at USD 91.46 per barrel.

Also Read | Asian shares fall as oil prices rise, inflation worries weigh on markets

"Two developments during the last several hours are likely to impact the market today,at least in the early hours of trading. One, Brent crude has again spiked above USD 91 on escalation of tensions between Iran and the US. Two, the US 10-year bond yield has increased to 4.73 per cent and this is negative for FII inflows which had turned positive in July and August so far," V K Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd, said.

He added that the resilient Indian economy and signs of a turnaround in earnings growth remained positive factors for the market.

Asian markets also trade lower

Asian markets were largely under pressure, with South Korea's Kospi, Japan's Nikkei 225, Shanghai's SSE Composite index and Hong Kong's Hang Seng index trading in the red.

US markets also ended lower on Monday as investors remained cautious amid higher oil prices and concerns over the Iran-US tensions.

"Elevated crude, with Brent near USD 91 on unresolved Iran tensions, kept sentiment guarded. Wall Street mirrored the caution," Rajesh Palviya, Head of Research at Axis Direct, said.

Also Read | India’s unemployment rate falls to 5.1% in July

FIIs sell over Rs 2,500 crore

Foreign Institutional Investors (FIIs) sold equities worth Rs 2,535.10 crore on Monday, according to exchange data.

The domestic market had already ended lower for the fifth consecutive session on Monday. The Sensex fell 281.09 points, or 0.36%, to close at 77,728.16, while the Nifty declined 78.35 points, or 0.32%, to settle at 24,287.65.