Sensex drops more than 100 points

Indian stock market: Monday’s opening trade saw a decline in equity benchmarks.

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Early on Monday, Indian equities indexes declined as a rise in crude prices outweighed expectations that efforts to loosen China’s economic restraints will eventually boost the outlook for global growth and the demand for risky assets.

The 30-share BSE Sensex index dropped 135.87 points to 62,732.63 in early trade on Monday, while the larger NSE Nifty-50 index also started the day lower, defying a wave of gains in other Asian exchanges following reports that some of the strict curbs enforced in Chinese cities had been relaxed.

Advances in domestic equities may be constrained by rising oil prices after OPEC+ convened on Sunday and kept its output objectives in expectation of an increase in fuel demand.

On Wednesday, the RBI will publish its monetary policy, which will be a hot issue for Indian stock markets. The Reserve Bank of India expects interest rates to rise by a more moderate 35 basis points to 6.25 percent.

Wall Street stocks ended the day lower on Friday as investors digested a stronger-than-expected jobs report that cast doubt on the ability of the US central bank to temper rate hikes.

Beijing’s efforts to make its zero-COVID policy more focused and manageable helped to support the global risk sentiment early on Monday. Chinese cities announced a relaxation of coronavirus bans on Sunday.

“While the easing of some restrictions does not equate to a wholesale shift away from the dynamic COVID zero strategy just yet, it is further evidence of a shifting approach, and financial markets look to be firmly focussed on the longer-term outlook over the near-term hit to activity as virus cases look set to continue,” Taylor Nugent, an Economist at NAB, told Reuters.

MSCI’s broadest index of Asia-Pacific shares outside of Japan climbed by 0.2% after climbing 3.7% last week to a three-month high.