MUMBAI — Indian benchmark equity indices opened on a weak note on Wednesday, extending losses as rising global crude oil prices and escalating Middle East geopolitical uncertainties unsettled investor appetite.

During early morning trading, the 30-share BSE Sensex dropped 166.19 points to trade at 77,070.93. Simultaneously, the broader 50-share NSE Nifty dipped 59 points, slipping to 24,096.75.

Market sentiment turned risk-averse following the expiry of a temporary 60-day US-Iran ceasefire without a conclusive diplomatic breakthrough. The lapse has renewed fears of long-term supply disruptions in energy markets, pushing international crude prices upward and driving global bond yields to multi-year highs.

Brent crude, the global benchmark, advanced 0.67% to reach $91.63 per barrel in early trade.

Top Gainers and Laggards

Heavyweight industrial and financial stocks led the selling pressure on the BSE Sensex. Tata Steel, Larsen & Toubro, Bajaj Finance, Bharat Electronics, Power Grid, and Mahindra & Mahindra featured among the biggest laggards in early deals.

Conversely, buying interest in select technology and healthcare counters provided minor support to the indices. HCL Technologies, Infosys, Eternal, Sun Pharma, and Kotak Mahindra Bank were trading in the green.

Expert Take on Market Dynamics

Market analysts attribute the persistent weakness to a combination of rising energy costs and elevated US Treasury yields.

"The expiry of the temporary 60-day US-Iran ceasefire without any meaningful diplomatic breakthrough has renewed concerns over a prolonged disruption to energy supplies, driving crude oil prices higher and pushing long-term US Treasury yields to multi-year highs. The combination has triggered a broad risk-off mood across global financial markets," noted Ponmudi R, CEO of Enrich Money.

Adding to the perspective, Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, stated:

"The ongoing mild weakness in the market is driven mainly by two factors: one, the rising crude prices, and two, appreciating bond yields globally. Crude prices have been responding to news from the Middle East for many months since the start of the conflict. Now, there is total uncertainty about the outcome of this conflict."

Global and Regional Cues

Asian equities reflected the subdued sentiment across the board. South Korea’s Kospi plunged 5.59% in morning trade, while Japan’s Nikkei 225 and China’s Shanghai Composite Index traded significantly lower. Hong Kong’s Hang Seng Index managed slight gains amidst the volatility. Overnight, Wall Street benchmark indices closed in negative territory on Tuesday.

FII Activity and Previous Session Recap

Despite the domestic weakness, Foreign Institutional Investors (FIIs) remained net buyers in the Indian cash market on Tuesday, picking up equities worth ₹1,651.53 crore, according to preliminary exchange data.

In the previous session on Tuesday, the Sensex dropped 492.70 points (0.63%) to settle at 77,235.46, marking its third straight loss. Meanwhile, the Nifty tumbled 132.75 points (0.55%) to close at 24,154.90, locking in its sixth consecutive session of declines.