Indian equity markets opened largely flat on Thursday as escalating tensions in the Middle East kept crude oil prices above $100 a barrel, while investors awaited key US economic data ahead of the Federal Reserve's policy meeting next week.
The BSE Sensex was at 74,805.07, up 40.84 points, or 0.05%, at 9:17 am. The NSE Nifty stood at 23,435.80, up 4.30 points, or 0.02%.
The muted opening came after both benchmark indices closed at three-month lows on Wednesday. The Nifty and Sensex have declined in seven of the past eight sessions, losing around 3.1% each during the period.
Crude prices remained a key concern for Indian markets as the conflict in the Middle East intensified. Iran said it had attacked 10 ships near the Strait of Hormuz after the US sank five Iranian oil tankers, in what was described as the largest attacks on shipping since the conflict began six months ago.
Higher crude prices are a concern for India, the world's third-largest oil importer, as they can increase the country's import bill, add to inflationary pressures and weigh on economic growth and corporate profitability.
"Costlier crude will squeeze margins in oil-sensitive sectors such as aviation, paints, tyres, chemicals, logistics and parts of FMCG," said Rajeev Sharan, head of research at Brickwork Ratings.
{{/usCountry}}"Costlier crude will squeeze margins in oil-sensitive sectors such as aviation, paints, tyres, chemicals, logistics and parts of FMCG," said Rajeev Sharan, head of research at Brickwork Ratings.
{{/usCountry}}He added that dearer oil could increase inflation risks and strengthen the case for the US Federal Reserve to adopt a hawkish stance or even raise interest rates at its September 16 meeting.
Foreign portfolio investors remained net sellers in Indian equities, with outflows of ₹583 crore on Wednesday. Domestic institutional investors, however, bought shares worth ₹1,509 crore, according to provisional NSE data.
GIFT Nifty futures were at 23,489.50 points at 7:44 am, indicating a muted start for the Nifty 50.
Stocks to watch
Hindustan Zinc: The company signed a six-year transportation pact with MFL India for the deployment of 30 electric trucks.
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Coal India: Its subsidiary Northern Coalfields reported an improvement in production and dispatches as the monsoon receded.