Indian equity markets opened on a cautious note on Thursday as rising global crude oil prices triggered renewed inflation worries, leading to a sharp decline in automobile stocks. The sector witnessed broad-based selling pressure with the Nifty Auto index falling nearly 3 percent, making it the worst-performing sectoral index in morning trade.

At around 10:44 am, the benchmark indices were trading lower, with the Sensex declining about 550 points, or 0.7 percent, to hover slightly above the 76,300 mark. The Nifty slipped below 23,700 as investors reacted to rising global energy prices and growing geopolitical tensions. Market breadth remained weak, with declining stocks significantly outnumbering gainers on the NSE.

The selling pressure was particularly visible in automobile counters, where concerns over fuel-driven inflation and rising input costs weighed heavily on investor sentiment. Automobile manufacturers accounted for a large portion of the benchmark index’s top losers during the session.

Mahindra and Mahindra emerged as the biggest laggard on the Nifty, with the stock falling roughly 3.45 percent. Other major automobile companies also saw declines. Eicher Motors dropped about 2.8 percent, Tata Motors Passenger Vehicles slipped around 2.5 percent, while Maruti Suzuki fell nearly 2.4 percent. Bajaj Auto also declined approximately 2.2 percent, reflecting widespread pressure across passenger vehicle and two-wheeler manufacturers.

The immediate trigger for the sector’s weakness has been the sharp rebound in global crude oil prices. Brent crude has climbed close to the $100 per barrel level amid escalating tensions in the Middle East and reports of shipping disruptions near the Strait of Hormuz, one of the world’s most critical oil transit routes. A significant portion of global energy shipments moves through this corridor, and any disruption tends to trigger supply fears and price volatility in global oil markets.

For the automobile industry, higher crude oil prices have several implications. At the consumer level, rising fuel costs can weaken demand for vehicles, particularly in price-sensitive markets such as India. Higher petrol and diesel prices often lead consumers to delay discretionary purchases, including new cars and two-wheelers.

At the manufacturing level, crude oil also influences input costs. Many vehicle components rely on petrochemical derivatives such as plastics, synthetic rubber, and specialty chemicals. When crude prices rise, these raw materials typically become more expensive, potentially squeezing operating margins for auto manufacturers.

Another emerging concern is the potential disruption to global gas and CNG supply chains. A significant share of global natural gas trade also passes through Middle Eastern shipping routes. If tensions escalate further and supply routes remain constrained, fuel availability and pricing could become more volatile across several markets, including India.

The broader equity market sentiment also remained cautious as investors assessed the global risk environment. Apart from automobile stocks, other sectors also experienced moderate selling pressure. The Nifty Consumer Durables index declined around 1.9 percent, while the Nifty FMCG index dropped roughly 1.5 percent. Metal stocks also weakened, with the Nifty Metal index slipping about 1.4 percent.

However, the surge in crude prices provided some support to energy-related stocks. The Nifty Energy index gained over 1 percent during the session, while the Nifty Oil and Gas index advanced around 0.7 percent, reflecting improved revenue expectations for upstream energy companies when crude prices rise.

Market volatility also picked up amid the global uncertainty. The India VIX, often referred to as the market’s fear gauge, rose more than 4 percent, indicating heightened investor caution and expectations of increased near-term volatility.