Sensex, Nifty open lower as rising crude prices and inflation weigh on sentiment

Indian benchmark equity indices opened lower on Friday, with rising crude oil prices and mounting inflationary pressures offsetting support from sustained foreign investor buying.

The Nifty 50 was down 0.35% at 25,209.85, while the BSE Sensex slipped 0.09% to 81,833.78 at 9.15 am, according to Reuters. The muted start followed modest gains in the previous session.

GIFT Nifty futures had indicated a subdued opening earlier in the morning, trading at 25,267.5 at 7.13 am. The Nifty had closed Thursday's session at 25,299.35.

Foreign inflows offer support

Foreign institutional investors continued their buying streak, recording net purchases of ₹7,831 crore ($832.71 million) in Indian equities on Thursday, according to provisional data. This marked their ninth consecutive session of net buying.

Foreign investor inflows into Indian equities have reached $8 billion so far in November, the highest monthly tally since December 2020.

The Nifty 50 and Sensex have gained 1.1% each so far this week, putting them on course for a third consecutive weekly rise. The gains also signal a turnaround for India's equity market after nearly two years of underperformance against emerging-market peers.

Crude prices and inflation weigh on markets

Rising oil prices and domestic inflation remained key concerns for investors. Brent crude futures were trading at around $95.5 per barrel, compared with nearly $92 at the close of Indian markets on Thursday.

The rise in crude prices followed attacks on Saudi energy infrastructure and disruptions to shipping through the Strait of Hormuz, raising concerns over global oil supplies.

Meanwhile, India's retail inflation accelerated to 6.09% in October, breaching the Reserve Bank of India's upper tolerance limit of 6% for the first time in two years. Higher food prices contributed to the increase, fuelling expectations of further monetary tightening.

How the markets closed on Thursday

On Thursday, the 30-share BSE Sensex advanced 31.61 points, or 0.04%, to settle at 81,911.01. During the session, it touched a high of 82,325.61 and a low of 81,576.15.

The 50-share NSE Nifty gained 44.30 points, or 0.18%, to close at 25,299.35.