Sensex, Nifty Opens With Gap-Down As Crude Rally Continues; 30-Day Waiver On Russian Oil Purchase Caps Losses

Benchmark indices opened with a gap-down on March 6 as crude oil prices continued to climb. The relentless rally in oil triggered a sell-off on Wall Street overnight, which in turn weighed on sentiment in domestic markets. However, the United States Department of the Treasury issued a temporary waiver on economic sanctions against Russia, allowing the delivery and sale of Russian oil currently stranded at sea to India. This eased off some concerns over the potential increase in domestic oil prices.

The BSE Sensex opened with 356.91 points, or 0.44 per cent, gap-down at 79,658.99, and then trickled to a the day’s low so far at 79,443.47. Similarly, the NSE Nifty 50 started lower by 109.05 points, or 0.44 per cent, at 24,587.15. The 50-share index slipped to an intraday low of   24,587.15.

Among Nifty's sectoral indices, realty banks, and financial services bled the most, while IT, metals, oil & gas, and chemicals lent support.

The broader market bucked the trend in benchmarks, showing resilience in the face of uncertainty. The Midcap 100 traded flat-to-positive, the Nifty Smallcap 100 was up by 0.25 per cent, while the Nifty Microcap 250 traded higher by 0.40 per cent.

Crude Oil Prices Hit Higest Level Since July 2024

Crude oil prices rallied nearly 5 per cent in the previous session, hitting their highest level since July 2024. In today’s session, however, the benchmarks have corrected by about 1 per cent from the previous close.

At the time of filing this report, May Brent crude futures were trading at $84.48 per barrel, down 1.09 per cent, while April West Texas Intermediate (WTI) crude futures were lower by 1.35 per cent at $79.92 per barrel.

Since the Iran war started, the crude benchmarks have surged 15-17 per cent over the past five days.

US Offers India A 30-Day Waiver To Buy Russian Oil

In a post on X, on March 5, US Treasury Secretary Scott Bessent said that the 30-day waiver is intended "to enable oil to keep flowing into the global market" amid severe disruption in the West Asian region, and "alleviate pressure caused by Iran's attempt to take global energy hostage."

However, Bessent added that "this deliberately short-term measure will not provide significant financial benefit to the Russian government as it only authorises transactions involving oil already stranded at sea.”

This comes after the US withdrew the 25 per cent “penalty” tariffs it had imposed on India for purchasing Russian oil and allegedly “supporting” the war in Ukraine.