Sensex, Nifty fall as crude oil rises, Tata stocks drag; inflation data eyed

Indian equity benchmarks opened lower on Wednesday, extending losses as global crude oil prices climbed and select Tata Group stocks came under selling pressure. The Sensex shed around 180 points in early trade, while the Nifty 50 slipped below its previous close, tracking weak cues from global markets.

Rising oil prices — driven by the ongoing standoff in the Strait of Hormuz — kept investors on edge. A sustained increase in crude could stoke imported inflation and widen India's trade deficit, a worry that has resurfaced in recent sessions.

Tata stocks lead the decline

Shares of Tata Group companies were among the prominent losers, pulling the benchmarks lower. The decline was broad-based within the group, though specific triggers were not immediately clear. Traders pointed to profit-booking after a recent run-up in some Tata counters, but no official statement from the group or its listed entities had been issued by the time of writing.

The weakness in Tata stocks added to the pressure from higher oil prices, which typically hurt sectors such as aviation, paints, and auto — all sensitive to input costs. The combined effect dragged the Sensex and Nifty into negative territory in early deals.

Inflation data in focus

Market participants are now awaiting domestic inflation data, scheduled for release later in the day. The print is expected to shape expectations for the Reserve Bank of India's monetary policy trajectory in the coming months.

Economists have flagged that a sustained rise in crude prices could push retail inflation higher, complicating the RBI's efforts to keep price pressures within its target band. Any upside surprise in the data could prompt a reassessment of rate-cut bets, which have been a key driver of the recent rally in equities.

Global cues weigh

Asian markets traded mixed, while oil prices remained elevated due to the Hormuz deadlock, a critical chokepoint for global crude shipments. The geopolitical uncertainty has added a layer of caution across risk assets, including Indian equities.

Foreign institutional investors, who have been net buyers in recent weeks, may adopt a wait-and-watch stance until the inflation print and global cues become clearer, analysts said.

Nifty closes lower

By the close of trade, the Nifty 50 was down 0.15%, while the Sensex ended with a loss of about 180 points. Broader indices also traded weak, with midcap and smallcap stocks showing mixed trends.

Sectorally, oil and gas, auto, and metal stocks faced selling pressure, while some defensive pockets such as IT and pharma saw selective buying. The rupee also remained under pressure against the dollar, tracking higher crude prices.

Volatility is likely to persist in the near term. Investors will now watch the inflation data for immediate direction, while the evolving situation in the Hormuz strait and its impact on oil prices will remain a key monitorable.