The Indian equity markets opened in the red on Friday amid fresh clashes between Iran and the United States in the Strait of Hormuz. BSE Sensex opened 500 points lower while the broader Nifty 50 declined 120 points in early trade amid mixed global cues.
The escalation in the Strait of Hormuz weakened investor sentiment and increased nervousness across Asian markets.
Analysts said Indian equities are likely to remain highly sensitive to geopolitical developments and news flow in the near term.
The Sensex fell 500 points, or 0.60 per cent, to 77,401 at 9:30 a.m., after opening at 77,631.94 against the previous close of 77,844.52.
The Nifty 50 declined 120 points, or 0.50 per cent, to 24,205.75. The fresh volatility has forced Foreign Institutional Investors (FIIs) towards aggressive selling in April, even as benchmark indices recovered sharply over the past two weeks.
The uncertainty in the Strait of Hormuz has triggered a rise in crude oil prices, which climbed to $103 in early trade.
Meanwhile, FII selling has wiped out nearly Rs 68,900 crore in April, suggesting sustained pressure on large-cap equities and overall market sentiment.
While the Indian stock market is expected to recover slowly in the coming weeks, increased fund outflows, a strengthening dollar, and high-yielding U.S. Treasury bonds are likely to keep sustained pressure on the markets.
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