Share Markets End In Red As Crude Soars: Sensex About 400 Points Down, Nifty Below 23,800
Technology stocks were among the biggest drags on the benchmark indices, with Infosys, Tech Mahindra and Bajaj Auto featuring among the top Nifty losers.
Indian benchmark indices ended lower on Monday as rising crude oil prices, renewed tensions between the US and Iran and concerns over the Federal Reserve's interest-rate trajectory weighed on investor sentiment. Weakness in technology stocks added to the pressure, while domestic institutional investors provided some support to the broader market.
The BSE Sensex ended close to 400 points down, touching 76,133, while the NSE Nifty50 rang the closing bell around 23,780, tanking more than 100 points.
IT Stocks Lead Market Decline
Technology stocks were among the biggest drags on the benchmark indices, with Infosys, Tech Mahindra and Bajaj Auto featuring among the top Nifty losers.
The Nifty IT index was among the worst-performing sectoral gauges, declining around 2 per cent earlier in the session. Investors remained cautious about the outlook for Indian technology companies after stronger-than-expected US employment data raised expectations that the Federal Reserve could maintain a relatively hawkish stance.
Higher US interest rates could potentially weigh on client technology spending, particularly given the substantial exposure of Indian IT companies to the US market.
Crude Oil Surge Raises Inflation Concerns
The sharp rise in oil prices remained one of the biggest concerns for Indian equities.
Brent crude climbed to around $96.80 per barrel, while WTI crude rose to approximately $92.14, following renewed US-Iran tensions and retaliatory attacks involving tankers around the Strait of Hormuz.
The strategic waterway accounts for roughly one-fifth of global oil transit. Any prolonged disruption could therefore have significant implications for energy markets.
For India, an extended period of elevated crude prices could increase the country's import bill, put pressure on the rupee and add to inflation and input-cost concerns. Oil-sensitive sectors could consequently remain under pressure.
Broader Market Performance Remains Mixed
The broader market showed a more uneven trend compared with the frontline indices.
At the latest available levels, the Nifty MidCap index declined 0.15 per cent, while the Nifty SmallCap index gained 0.24 per cent.
Sectoral performance was similarly mixed. Nifty IT, Realty and PSU Bank indices were among the major decliners, whereas Pharma and Healthcare emerged as the leading gainers.
Earlier in the session, 14 of the 16 major sectoral indices were trading in negative territory.
FII Selling Continues, DIIs Provide Cushion
Institutional flows continued to show a sharp divergence.
Foreign portfolio investors remained net sellers on Friday, offloading Indian equities worth Rs 3,112 crore. In contrast, domestic institutional investors made net purchases of Rs 8,920 crore.
The contrasting flows remain an important factor for the domestic market, particularly as higher crude prices and elevated US yields could encourage further risk-off positioning among overseas investors.
US Jobs Data Keeps Fed Rate Outlook In Focus
Global investors are also assessing the outlook for US monetary policy following stronger-than-expected employment data.
The US economy added 162,000 jobs in August, above expectations, while the unemployment rate stood at 4.1 per cent. Following the data, the Dow Jones Industrial Average fell 0.51 per cent, the S&P 500 declined 0.38 per cent and the Nasdaq Composite lost 0.29 per cent on Friday.
The US 2-year Treasury yield also rose to 4.37 per cent, adding to uncertainty over the Federal Reserve's rate path.
Investors will now turn their attention to key US inflation readings later this week. US PPI data is due on Thursday, followed by CPI inflation data on Friday, with both releases likely to influence expectations around interest rates, bond yields and the US dollar.
Asian Markets Gain Despite Global Concerns
Asian equities offered some relief during Monday's session despite the weak signals from Indian markets.
Japan's Nikkei 225 rose nearly 2 per cent, while South Korea's Kospi advanced more than 3 per cent. However, stronger regional markets failed to offset concerns over rising energy prices and geopolitical risks in the Indian market.
Rupee, Bond Yields Remain On Investors' Radar
The Indian rupee had gained around 0.9 per cent last week, helped by dollar selling by the Reserve Bank of India and inflows through special schemes.
However, higher crude prices and US Treasury yields could put renewed pressure on the domestic currency.
The 10-year Indian government bond yield ended last week around 6.9625 per cent, after rising for a third consecutive week, pointing to continued pressure in the domestic bond market.
NSE Revises Pre-Open Session From Today
Monday also marked the implementation of the NSE's revised 15-minute pre-open session framework.
While the overall 9:00 AM to 9:15 AM window remains unchanged, the order-entry and matching process has been divided into separate phases. Limit and market orders are allowed between 9:00 AM and 9:05 AM, followed by a limit-order-only window from 9:05 AM to 9:10 AM.
Order matching and trade confirmation take place between 9:10 AM and 9:12 AM, followed by a three-minute buffer before regular trading begins.
The revised framework applies to the equity cash segment, including main-board stocks, SME shares, REITs, InvITs and partially paid-up shares.
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