Stock markets open higher as crude oil prices drop

MUMBAI: Market benchmark indices Sensex and Nifty were trading higher in early trade on Wednesday, in tandem with a positive trend in global equities, amid a sharp decline in crude oil prices.

Foreign fund inflows also added to the positive trend in the domestic markets.

The 30-share BSE Sensex climbed 285 points to 77,944.02 in early trade. The 50-share NSE Nifty was up 23.25 points to 24,356.10.

Among the 30 Sensex firms, ICICI Bank, State Bank of India, Kotak Mahindra Bank, Eternal, Bajaj Finserv and Asian Paints were among the major winners.

Infosys, Bharti Airtel, Larsen & Toubro and Bharat Electronics were among the laggards.

Brent crude, the global oil benchmark, traded 2.66 per cent lower at USD 86.22 per barrel.

"Crude oil has emerged as the key positive catalyst. WTI has fallen more than 6 per cent over the past two sessions to trade in the USD 80–81-per-barrel range. For domestic markets, the retreat in oil prices provides a meaningful near-term tailwind after crude-driven inflation worries dominated sentiment over the past several weeks," Ponmudi R, CEO of Enrich Money, an online trading and wealth-tech firm, said.

While tensions between the US and Iran remain elevated, recent developments surrounding discussions involving Iran and Oman over the Strait of Hormuz have raised cautious optimism that supply-disruption risks could ease, he added.

In Asian markets, South Korea's Kospi, Japan's Nikkei 225 index, Shanghai's SSE Composite index and Hong Kong's Hang Seng index quoted higher.

US markets ended in positive territory on Tuesday.

"The most significant development for domestic markets is the continued decline in crude oil prices. Brent crude has eased to around USD 85.5 per barrel, extending its retreat from last week's peak near USD 94, as concerns over supply disruptions continue to recede," Hariselvan Radhakrishnan, Founder & CEO of HST Wealth, a Research Analyst firm, said.

Wall Street ended higher overnight as lower energy prices and easing treasury yields lifted risk appetite, he added.

Foreign Institutional Investors (FIIs) bought equities worth Rs 1,593.53 crore on Tuesday, according to exchange data.

On Tuesday, the Sensex bounced back during the fag-end of trading and was up 286.98 points, or 0.37 per cent, to settle at 77,656.09. Similarly, the Nifty ended higher by 115.50 points, or 0.48 per cent, at 24,334.55 on fag-end buying.