Source : INDIA TODAY NEWS
Stock markets opened lower on Monday, extending last week’s sell-off as elevated crude oil prices, concerns over inflation and losses in IT stocks weighed on investor sentiment. Investors are also watching for the US Federal Reserve’s policy decision later this week, with uncertainty over interest rates adding to caution.
The BSE Sensex was trading at 72,584.94, down 538.89 points, or 0.74%, as of 9.24 am. The index opened at 72,990.04 and slipped to an intraday low of 72,549.76.
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The NSE Nifty 50 fell 211.80 points, or 0.94%, to 22,388.20. The index opened at 22,524.40 and touched a low of 22,387.45.
CRUDE OIL REMAINS A KEY CONCERN
Elevated crude oil prices continued to weigh on sentiment, even as prices eased from their recent highs. Brent crude futures fell 2.07% to $114.30 per barrel, while US West Texas Intermediate crude declined 2.25% to $100.95.
Despite the decline, oil prices remain high enough to raise concerns about India’s import bill, inflation and corporate margins. Continued tensions in the Middle East have kept the risk of supply disruptions in focus.
Investors are also awaiting the US Federal Reserve’s policy decision later this week for signals on the interest-rate outlook and global financial conditions.
IT STOCKS LEAD THE DECLINE
IT stocks were among the biggest drags on the market. The Nifty IT index fell 1.16%, with Infosys down 1.95% and HCL Technologies losing 1.14%. Tech Mahindra declined 0.88%, while Tata Consultancy Services fell 0.54%.
Infosys shares came under pressure after the company cut its annual revenue growth forecast, as weakness in its key North American market outweighed better-than-expected revenue.
Selling was broad-based, with 15 of the 16 major sectoral indices in the red. The Nifty Auto index fell 1.41%, the Nifty FMCG index declined 1.48%, and the Nifty PSU Bank index dropped 1.59%. The Nifty Realty index lost 1.26%, while the Nifty Financial Services 25/50 index slipped 1.11%.
Pharma and healthcare stocks offered some support, with the Nifty Pharma index rising 0.36% and the Nifty Healthcare Index gaining 0.31%.
BROADER MARKETS UNDER PRESSURE
The sell-off extended beyond the benchmark indices. The Nifty 100 fell 0.95%, the Nifty 200 declined 1% and the Nifty 500 dropped 1.07%.
Midcap and smallcap stocks also remained under pressure. The Nifty Midcap 50 fell 1.19%, the Nifty Midcap 100 declined 1.22%, and the Nifty Smallcap 100 lost 1.66%.
India VIX, which measures expected market volatility, rose 6.45% to 17.95, signalling heightened uncertainty.
Dr V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said crude oil prices remain a major constraint on any market recovery, despite easing slightly below $115 per barrel.
“Despite the slight cooling in Brent crude price to below $115, the price continues to be too high and, therefore, will constrain any rally from the low level of 22600 which Nifty touched last Friday. Investors should not bother about the index levels in the near-term. Their focus should be on the value buys that have emerged from this correction, even while exercising caution about the macro fallout of the high crude prices,” he said.
Vijayakumar also pointed to the correction in midcap and smallcap stocks, saying high valuations and the forced liquidation of margin-funded positions had contributed to last week’s sharp decline in the broader market.
“The broader market continues to be over-valued, but this sharp correction will open up opportunities in high-growth segments in the broader market,” he said.
He added that the weakening of the global AI trade could be positive for India, noting that foreign portfolio investor outflows from South Korea and Taiwan in September and October so far had exceeded those from India.
Investors will track crude oil prices, developments in the Middle East and the US Federal Reserve’s policy decision for cues on market direction. The ability of oil prices to ease further will be important for India’s inflation outlook, while valuations and earnings growth could determine whether buying emerges after the recent correction.
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)
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SOURCE :- TIMES OF INDIA
