Indian markets opened lower on Thursday as crude oil prices surged above $100 per barrel following US President Donald Trump's decision to continue the blockade of the Strait of Hormuz. At 0945 IST, the Nifty 50 was at 24,239.55 points, down 138.55 points or 0.6%, while the BSE Sensex was at 77,930.31 points, down 586.18 points or 0.8%. More than half of the Nifty 50 constituents were trading lower, with Dr. Reddy's Laboratories leading gains with over 4% and Oil and Natural Gas Corp. rising nearly 2%. The April futures contract of Gift Nifty was at 24,212, short of 160 points from the Nifty 50's previous close of 24,378.10. Technical analysts warn that a decisive breakdown below 24,350 level could trigger further downside momentum, potentially dragging the index towards the 24,000 zone.
Foreign portfolio investors continued their selling spree, net selling shares worth ₹3,254 crore on Thursday, while domestic institutional investors provided crucial support by being net buyers at ₹940 crore, as reported by The Economic Times. However, the situation has worsened with foreign investors offloading about ₹44,281.38 crore in April up to the 22nd, according to recent data. This sustained foreign selling pressure, combined with strong domestic buying, highlights the divergent investment patterns in the current market environment.
Crude oil prices surged past $105 and traded near $107 a barrel due to potential escalations in West Asia, with Brent crude reaching these elevated levels. This oil price volatility, alongside the Indian rupee weakening to about 94.01 against the US dollar, raised inflation worries and hit investor confidence. The currency weakness was attributed to soaring crude oil prices as West Asia peace talks moved to an uncertain trajectory, with the rupee extending its losing streak for the fourth consecutive session. As per Kotak Institutional Equities, the brokerage expects retail prices of petrol and diesel to rise sharply after the ongoing state assembly elections due to elevated crude oil prices, with a hike of ₹25-₹28 per litre.
Sector performance showed mixed results, with defensive sectors like pharmaceuticals and healthcare holding up while the information technology sector faced significant pressure, falling 2.87% on April 22, 2026, ahead of its earnings season. Despite strong domestic buying, structural issues continue to overshadow Indian stocks, with analysts predicting a 2-4% cut in Nifty 50 earnings growth forecasts. The upcoming earnings season for major IT firms will offer insights into sector-specific challenges, while analysts favor a 'barbell' approach mixing domestic cyclicals with defensives for greater safety. Tech Mahindra was the worst hit in the index, falling nearly 3% after reporting a 21% sequential growth in net profit to ₹13.54 billion, missing analyst estimates of ₹14.98 billion. The company's consolidated revenue grew 5% sequentially and 13% year-on-year to ₹150.76 billion, beating expectations of ₹148.12 billion.
The market reaction points to shifting global investment trends, with India's equity valuations still higher than key Asian markets despite recent moderation. The Nifty 50's trailing price-to-earnings ratio stands at 21.09x, looking less attractive compared to China's P/E of 9.95x to 16.97x and Hong Kong's Hang Seng at 11.8x. This valuation gap is a major factor for foreign portfolio investors, who continue selling Indian stocks due to better risk-reward opportunities elsewhere in Asia. The correction also highlighted India's relatively high valuations compared to cheaper Asian peers.
