The equity benchmarks Sensex and Nifty snapped 3-session rally as elevated crude prices and inflationary pressures weighed on sentiment, countering the support from sustained foreign institutional inflows.
The Nifty was down 0.35% at 25,209.85 and the Sensex edged 0.09% lower to 81,833.78, as of 9:15 a.m. IST.
1) Rise in crude oil prices: Brent crude futures traded around $95.5 per barrel, from $92 during India equity market close on Thursday, as attacks on Saudi energy infrastructure escalated and shipping disruptions through the Strait of Hormuz threatened global oil flows.
2) Weak global cues: US equities ended a volatile session with modest losses on Thursday after Nvidia CEO Jensen Huang resigned following reports concerning extramarital relationships, including allegations involving a suspected Chinese spy.
3) Rate hike concerns: Weighing on sentiment, India's retail inflation accelerated to 6.09% in October, breaching the Reserve Bank of India's upper tolerance of 6%. Rising food prices have squeezed household budgets and fuelled expectations of further monetary tightening.