Stock markets opened sharply lower on Wednesday, extending the recent sell-off as a fresh escalation in the Middle East conflict pushed Brent crude closer to the $100-a-barrel mark. IT stocks led the decline, while growing expectations of a US rate hike and continued liquidity pressure from the booming IPO market added to the cautious mood on Dalal Street.
At 9:29 am, the BSE Sensex was down 533.48 points, or 0.71%, at 75,044.10. The index opened at 75,216.22 against Tuesday’s close of 75,577.58 and touched an early high of 75,220.88 before slipping to a low of 74,968.99.
The Nifty 50 was down 127.25 points, or 0.54%, at 23,507.85. It opened at 23,522.05, touched a high of 23,536.50 and fell to a low of 23,477.55.
The broader market also opened lower, although the decline was less severe than in the benchmark indices. Nifty 100 fell 0.46%, Nifty 200 declined 0.44% and Nifty 500 dropped 0.38%. Nifty Midcap 50 fell 0.46%, while Nifty Midcap 100 declined 0.35%. Nifty Smallcap 100 was down 0.15%.
India VIX, the market’s volatility gauge, rose 3.02% to 11.57.
IT stocks were the biggest drag. The Nifty IT index fell 3.06%, with Infosys declining 3.50%, HCL Technologies falling 3.67%, Tech Mahindra down 3.43% and TCS declining 2.88%.
Coforge was among the biggest losers in the IT pack, falling 5.70%, while Persistent Systems declined 2.42%, LTI Mindtree fell 2.52%, Mphasis dropped 2.32% and Wipro declined 2.07%.
The weakness in Coforge followed the resignation of chairman Om Prakash Bhatt after concerns were raised by an internal audit over the company’s board evaluation process.
Crude oil prices added to the pressure. Brent crude was trading at $99.33 a barrel, up 1.44%, while WTI crude rose 1.29% to $94.23. The latest escalation in the Middle East has raised concerns about disruptions to oil flows and the impact of higher crude prices on inflation and India’s import bill.
Ten of the 16 major sectoral indices were in the red. Nifty Media fell 0.66%, Nifty Financial Services 25/50 declined 0.75%, Nifty Auto dropped 0.74% and Nifty FMCG fell 0.56%.
Nifty Metal was one of the few sectors in the green, rising 0.70%, while Nifty Pharma gained 0.36% and Nifty Healthcare rose 0.56%.
Among Sensex stocks, LT was the top gainer, rising 1.39%, followed by NTPC, which gained 0.95%, and Sun Pharma, which rose 0.90%. Power Grid advanced 0.58%, Tata Steel gained 0.35%, BEL rose 0.32% and Kotak Mahindra Bank was up 0.30%.
On the losing side, HCL Technologies fell 3.67%, Infosys declined 3.50%, Tech Mahindra dropped 3.43% and TCS fell 2.88%. Bharti Airtel, IndiGo, M&M, HDFC Bank, Bajaj Finance and UltraTech Cement were also among the major losers.
The market is now facing pressure from several fronts — elevated crude oil prices, geopolitical uncertainty, higher US rate expectations and the ongoing shift of liquidity towards the primary market through IPOs.
