New Delhi: Indian stock indices traded higher in early trade on Wednesday, primarily due to the latest sharp drop in global crude prices.
Global crude prices declined to $100 per barrel on Wednesday, in comparison to $110 on Monday. The crude has been trading over the psychological benchmark of $100 per barrel ever since Russia's invasion of Ukraine in late February.
At 9.51 a.m., Sensex traded at 53,397.71 points, up 263.36 points or 0.50 per cent, whereas Nifty was at 15,888.95 points, up 78.10 points or 0.49 per cent.
Barring the marginal rise in the indices today, the stock indices, however, have been experiencing a perfect storm for the past few weeks on account of tightening monetary policy triggered by rising inflation, high crude oil prices, depreciation of the rupee, fund outflows by foreign investors, as well as widening current account deficit.
So far in 2022, they have sold equities worth Rs 221,910 crore, NSDL data showed. During the same period, Sensex and Nifty declined almost 10 per cent each.
"While crude crash along with corrections in other commodities like metals is a bearish signal indicating increasing possibility of recession in the US, commodity crash is positive for the Indian economy and FIIs turning buyers is a bullish signal for Indian equity market. It is important to watch whether these signals are one offs or will they sustain," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
"With valuations reaching fair levels, investors can buy high-quality stocks in a calibrated manner. Stocks that FPIs sell like financials and IT are good segments to bet now," Vijayakumar added.
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