Benchmark stock market indices opened marginally lower on Tuesday as rising tensions in the Middle East and elevated crude oil prices kept investors cautious. However, gains in IT stocks helped limit the decline, while HDFC Bank remained under pressure for a second straight session.
The S&P BSE Sensex fell 54.36 points to 77,654.16, while the NSE Nifty50 slipped 8.70 points to 24,229.80 as of 9:25 am.
Investor sentiment remained subdued amid fresh geopolitical uncertainty, although crude oil prices eased slightly from recent highs. Brent crude was trading at $88.63 per barrel, down 0.66%, while WTI crude slipped 0.27% to $82.26 per barrel.
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said crude oil prices will remain the biggest factor influencing the market in the near term.
“In the near term, the market will be unduly influenced by the trends in crude price. Even though the softening of Brent crude to about the $88 level is a positive sign, the uncertainty is so huge that there is an upside risk to crude prices. This will weigh on markets,” he said.
HDFC BANK WEIGHS, IT STOCKS OFFER SUPPORT
HDFC Bank, the biggest-weighted stock on the benchmark indices, extended Monday’s losses and fell another 1.11% after plunging over 5% in the previous session.
Reuters reported that the private lender is awaiting an additional review by independent directors before recommending CEO Sashidhar Jagdishan’s reappointment to the Reserve Bank of India.
The weakness in HDFC Bank, along with losses in Reliance Industries (-0.51%), Maruti Suzuki (-0.58%), Sun Pharma (-0.84%) and Eternal (-0.80%), kept the benchmark indices under pressure.
However, buying in technology stocks prevented a sharper decline.
The Nifty IT index gained 0.45%, led by Tech Mahindra, which rose 1.55%. Infosys added 0.34%, while HCLTech advanced 0.30%. The Nifty MidSmall IT & Telecom index also gained 0.53%.
Among the Sensex constituents, Tech Mahindra was the top gainer, climbing 1.55%, followed by UltraTech Cement (0.69%), IndiGo (0.64%), ICICI Bank (0.57%), Tata Steel (0.48%), Bajaj Finserv (0.44%), Asian Paints (0.42%) and Infosys (0.34%).
BROADER MARKET REMAINS RESILIENT
Unlike the benchmark indices, the broader market traded in positive territory.
The Nifty Smallcap 100 gained 0.43%, Nifty Midcap 50 rose 0.17%, Nifty Midcap 100 added 0.14%, while the Nifty 500 advanced 0.09%. The Nifty 200 gained 0.03% and the Nifty 100 edged up 0.01%.
India VIX, the market’s volatility gauge, eased 0.44% to 12.92.
Sectorally, Nifty PSU Bank emerged as the top performer, rising 0.68%, followed by Nifty Chemicals (0.55%), Nifty MidSmall IT & Telecom (0.53%), Nifty IT (0.45%), Nifty Media (0.37%) and Nifty Metal (0.35%). On the other hand, Nifty Pharma declined 0.43%, Healthcare slipped 0.33%, Consumer Durables fell 0.40%, while Auto and Financial Services traded marginally lower.
Vijayakumar said domestic factors continue to provide support despite foreign investor selling.
“The FPI selling is not large enough to impact the market. It is easily getting absorbed by DII buying. There is good news on the progress of the Kharif sowing, with the sowing deficiency declining to 6%. The dollar inflows through the concessional swap facility have gone above $20 billion and are showing a healthy uptrend. This is positive for the rupee,” he said.
He added that the broader market may continue to outperform as the earnings season gathers pace.
“A significant market trend is the outperformance of the broader market. This trend may continue in response to Q1 results. The good results of Paytm indicate improving growth prospects of digital companies,” Vijayakumar said.
