Opening Bell: Benchmark indices open flat; Nifty slips below 17,100, Sensex drops more than 100 points

The Indian markets opened on a flat note amid rising crude oil prices as some members of the European Union were reportedly considering ban on Russian oil. The Russian war on Ukraine and Western sanctions on Russia are adding to worries over energy supplies for Europe, surging prices and progress toward economic recoveries from the pandemic has been wighing on the domestic market too. 

 V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services said a hawkish Fed and the US 10-year yield rising to 2.29% are headwinds for the global equity markets. For India, crude jumping to $118 from the recent $100 levels is again posing a major worry, said the market expert.

"This kind of short-term volatility in crude is highly unnerving. What investors should do in these highly uncertain times is to keep cool and wait for clarity  to emerge on the war front," he said.

Speaking of sectors that would not be affected at all by crude spike and potentially higher inflation, he said IT and pharma are safe havens from that point of view. "Metals will be volatile responding to global metal prices, which in turn will respond to news on the war front. Investors should ignore short-term gyrations in the market and stick to high quality stocks," he added.

Meamwhile, benchmark indices Nifty50 and the Sensex started on flat note with negative bias in line with the SGX Nifty trends on the Singaporean Exchange. The Nifty50 slipped below 17,100 after opening at 17,120.40 and the Sensex started flat at 57,297.57, only to decline futher by more than 100 points minutes after opening.  

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The 12-share Bank Nifty slipped below 36,000 as the index saw correction of over 150 points.  

Nifty midcap and small cap indices started flat, while banking, auto, FMCG and realty were seen under pressure. IT, media, metal and oil & gas saw buying interest the indices were trading in the green in the opening trade 

Nifty closed lower at 17,118 on Monday, while VIX ended higher at ~24-level. The Index seems to have formed a ‘Tweezer Top’ after two consecutive sessions of gain, which signals resistance at higher levels of 17,500-17,400, said Viraj Vyas, Technical and Derivatives analyst at Ashika broking 

"Momentum support is seen at the Bullish Gap (17,100- 17,000) and sustained closing below which might add weakness. To sum up, a follow-through move above the high witnessed in the previous session will add further bullish momentum while the Bullish Gap will continue to act as support," added Viraj. 

Earlier, in the pre-open, the Sensex was trading flat with positive bias as 19 shares advanced and 11 declined on the 30-share index.  

Asian markets were trading in the green on Tuesday morning. Japanese Nikkei 225 was up more than 1.5%, Hang Seng Index at the Hong Kong exchange gained 0.70% and Chinese Shanghai Composite was trading flat in the early trade around 8 am.  

SGX Nifty was too trading flat with positive bias as the future index rose marginally by 17 points to 17,168.50 on the Singaporean exchange around 8 am on Tuesday.  

In the US market, the Dow Jones Industrial Average fell 201.94 points, or 0.58%, to 34,552.99, the S&P 500 lost 1.94 points, or 0.04%, to 4,461.18 and the Nasdaq Composite dropped 55.38 points, or 0.4%, to 13,838.46. 

"U.S. stocks declined broadly while oil prices and Treasury yields pushed higher on Monday as investors refocused on risks from conflict in Ukraine and the U.S. Federal Reserve`s actions on inflation," said Reuters. 

(Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)