Benchmark indices opened lower on Tuesday, extending the sell-off from the previous session as rising crude oil prices, continued foreign investor outflows and elevated US Treasury yields kept sentiment weak.
The Sensex opened at 72,633.68, against Monday’s close of 72,771.72. At 9:30 am, the index was at 72,252.15, down 519.57 points or 0.71%.
The Nifty 50 opened at 22,732.45 and was trading at 22,635.10 by 9:29 am, down 145.15 points or 0.64%.
The weakness was broad-based, with all major broader market indices trading lower.
The Nifty 100 fell 0.63%, while the Nifty 200 declined 0.63% and Nifty 500 dropped 0.65%. The Nifty Midcap 50 fell 0.58%, Midcap 100 declined 0.64% and Smallcap 100 dropped 0.73%.
India VIX, the market’s volatility gauge, rose 3.07% to 14.06.
FINANCIAL STOCKS LEAD THE FALL
Financial stocks remained among the biggest drags on the market. Bajaj Finance fell 1.57%, HDFC Bank declined 1.36%, Kotak Mahindra Bank dropped 1.34% and Axis Bank fell 1.20%.
The Nifty Financial Services 25/50 index was down 0.92%, while the Nifty Private Bank index declined 1.06%. Financial Services Ex-Bank fell 0.90% and MidSmall Financial Services dropped 0.72%.
Among other major stocks, Infosys fell 0.93%, M&M declined 0.84%, Eternal dropped 0.77%, NTPC fell 0.75% and Trent declined 1.14%.
Sun Pharma was among the few gainers, rising 0.71%, while Adani Ports gained 0.18% and IndiGo rose 0.10%.
CRUDE OIL REMAINS A KEY CONCERN
Brent crude rose 1.57% to $106.93 a barrel, while WTI crude gained 1.44% to $93.93.
Oil prices have remained elevated amid continuing supply concerns linked to the US-Iran conflict. For India, higher crude prices can increase the import bill, add to inflationary pressure and put pressure on economic growth and corporate margins.
Thirteen of the 16 major sectoral indices were in the red in early trade.
The Nifty Media index fell 1.59%, Financial Services 25/50 declined 0.92%, PSU Bank dropped 0.80%, IT fell 0.70%, Auto declined 0.73% and Metal fell 0.63%.
FMCG fell 0.57%, Oil & Gas declined 0.74%, Consumer Durables dropped 0.57% and Chemicals fell 0.81%.
Pharma was among the few sectors in the green, gaining 0.57%, while Healthcare rose 0.43% and MidSmall Healthcare gained 0.36%.
Dr V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said, “With Brent crude above $106 and the US 10-year at 5.23%, the global macro construct continues to be unfavourable for equity markets. The emerging macro scenario in the US appears to be one of high growth and high inflation. The massive AI spending is driving growth and better-than-expected growth will keep inflation elevated, warranting one more rate hike by the Fed. This, in turn, is pushing US bond yields higher.”
He added, “Since higher crude prices have not been passed on to consumers, the fiscal strain on India will be higher in FY27. Therefore, if crude prices remain elevated, the fiscal strain can impact India’s GDP growth and corporate earnings growth for FY27. This concern, too, is weighing on the market.”
Vijayakumar also said, “The attractive valuations of large-cap growth stocks present buying opportunities for long-term investors.”
With crude remaining above $106, foreign flows weak and financial stocks under pressure, investors are likely to closely track oil prices, developments in the US-Iran conflict and global bond yields through the session.
