Mumbai, Sep 11 — Domestic equity benchmarks opened sharply lower on Friday tracking weak global markets as escalating Middle East tensions pushed oil prices higher and raised concerns over inflation and interest rates.
Sensex started nearly 600 points or 0.79 per cent lower at 74,309.16, while Nifty opened 207.50 points or 0.88 per cent down at 23,270.30.
Among sectors, Nifty Metal fell more than 3 per cent, making it the biggest decliner in early deals, followed by Nifty Realty which lost over 2 per cent.
Consumer durables, financial services, banking, auto and cement sector indices fell up to 1 per cent.
However, Nifty IT was the only sectoral index in positive territory and was trading 0.10 per cent up.
"Headwinds for the market are getting stronger with the escalation in the Middle East conflict. Brent crude has shot up to around $108," according to the market experts.
If elevated crude prices sustain or rise further, the impact on India's economic growth and corporate earnings could be significant, they said and added that rising US bond yields were another major headwind.
The US 10-year Treasury yield was around 4.96 per cent, approaching the 5 per cent level that is widely viewed as a potential inflection point for global equities, according to them.
Analysts said the Indian IPO market was currently attracting significant investor interest with heavy oversubscription and listing gains drawing funds away from the secondary market.
On the technical front, analysts said the Nifty could find the next downside targets at 23,260-23,000, while yesterday's long lower wick suggested that a base formation could be underway, despite weak recovery attempts. The upside marker remains at 23,520.
Investors should remain cautious given the challenging global and domestic environment, the experts said.
Additionally, Asian markets traded lower after rising oil prices sparked a Wall Street selloff. US stocks closed lower in the last session as stronger producer inflation data and rising oil prices fuelled concerns over another Fed rate hike.