Sensex Tanks Over 800 Points, Nifty Slips Below 22,750 Amid Oil Price Surge

The Indian Market opened in the red on Tuesday as the benchmark indices experienced a sharp decline during the early trade, tracking global cues and rising energy costs.

The 30-share BSE Sensex tumbled 824.44 points to 73,282.41 in early trade. The 50-share NSE Nifty dropped 248.95 points to 22,719.30.

From the 30-Sensex firms, InterGlobe Aviation, Eternal, Axis Bank, Mahindra & Mahindra, State Bank of India and Larsen & Toubro were the biggest laggards.

Tech Mahindra, HCL Tech, Bajaj Finance and Tata Consultancy Services were among the gainers.

The negative opening follows a surge in Brent crude prices, which traded at USD 111.43, up by 1.66 or 1.51 per cent as of 9:20 IST.

How Are FII Sell-Offs and DII Buying Shaping Indian Market Trends?

This spike in oil prices coincides with an approaching geopolitical deadline in the United States, creating an atmosphere of caution across international markets.

Concerns intensified after US President Donald Trump renewed threats against Iran over the Strait of Hormuz. The surge in oil prices has raised fears over inflation and India's import bill, weighing on overall risk appetite.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 8,167.17 crore on Monday, according to exchange data. Domestic Institutional Investors (DIIs), however, bought stocks worth Rs 8,088.70 crore.

In Asian markets, South Korea's benchmark Kospi and Shanghai's Composite index traded higher, while Japan's Nikkei 225 index quoted lower. Markets were closed in Hong Kong for a holiday.

Ajay Bagga, Banking and Market Expert, said, "One more deadline with dire threats looms for the markets on Wednesday morning Asia time, Tuesday night in the US. Markets are holding up with Japan and Korea up this morning. Oil is stable.”

What Trading Strategy Should Investors Follow in Current Indian Market Conditions?

“Indian markets are showing a negative open with continued FII selling daily, causing weakness,” he added.

Despite the current downturn, the markets recently witnessed a period of positive momentum where the Consumer, PSU Banks, and Realty sectors performed well.

However, the breach of opening levels today puts the focus back on critical support zones to determine if the recent pullback move remains intact.

Shrikant Chouhan, Head Equity Research, Kotak Securities, said, "Technically, after a muted open, the market found support near 22,550/72700 and reversed sharply.”

“On daily charts, it has formed a bullish candle, and on intraday charts, it is holding a higher bottom formation, which is largely positive. We are of the view that the market has completed one leg of the pullback move; hence, buying on intraday corrections and selling on rallies would be the ideal strategy for day traders,” Chouhan added.

Chouhan added that any slide below the 22,500 mark for the Nifty or 72,700 for the Sensex makes the current uptrend vulnerable.

"We consider 22,700/73500 and 22,500/72700 as key support zones for traders, while 23,200/74500 and 23,300/75000 could act as crucial resistance levels,” Chouhan said.

“However, if the index falls below 22,500/72700, the uptrend may become vulnerable. In such a scenario, traders may prefer to exit their long positions. The strategy should be to reduce weak long positions between 23150-23250/74500-74800 levels," he said.

However, the US market closed higher, with the S&P 500 and Nasdaq extending gains for a fourth straight session, while the Dow Jones also ended in the green.

(With inputs from ANI)