Source : INDIA TODAY NEWS
Benchmark indices opened lower on Monday as renewed escalation in the Iran war pushed crude oil prices above $90 a barrel and triggered caution across global markets. Investors were also bracing for volatility from the latest MSCI index reshuffle and India’s new closing-auction system.
The BSE Sensex fell 224.04 points, or 0.29%, to 77,040.47, while the Nifty 50 declined 110.85 points, or 0.46%, to 24,064.80 as of 9:25 a.m. The Sensex opened at 77,130.73, while the Nifty began at 24,117.55.
HDFC Bank, however, bucked the broader weakness and jumped 2.44%, making it the strongest gainer among the Sensex stocks. The rally came after India’s largest private-sector lender said CEO Sashidhar Jagdishan would not seek reappointment when his current term ends in October. ICICI Bank also gained 0.16%, while Eternal rose 1.19%.
The gains in HDFC Bank provided some support to the benchmarks, but selling remained broad-based. Infosys was the biggest Sensex loser, falling 1.96%, followed by Tata Steel and NTPC, both down 2.01%. Adani Ports, Asian Paints, Bajaj Finance, Power Grid, Bajaj Finserv and Ultratech Cement were also among the major laggards.
The market is starting the week against a difficult global backdrop. Brent crude rose 2.24% to $90.07 a barrel, while WTI crude gained 1.89% to $84.98, as the escalation in the Iran conflict raised fresh concerns over energy supplies.
Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said the market faces several headwinds, including the renewed escalation in tensions between the US and Iran and higher global bond yields.
“Another headwind is the renewed escalation of tensions between the U.S. and Iran pushing the Brent crude above $90,” Vijayakumar said. He added that the rise in bond yields following comments from Fed chief Kevin Warsh suggesting that persistent inflation could require further policy action was also negative for equities.
On HDFC Bank, Vijayakumar said the stock could see significant volatility as investors react to speculation around Jagdishan’s successor. “A key focus of the market today will be the HDFC Bank stock which can turn highly volatile responding to speculation surrounding the successor to Sasidhar Jagadishan,” he said.
Despite the pressure on the benchmarks, Vijayakumar expects activity in the broader market to remain strong, saying the market is increasingly giving more preference to growth over value.
IT, METALS LEAD SECTORAL SELLING
Fourteen of the 16 major Nifty sectoral indices were in the red at the open. Nifty IT fell 1.29%, with Infosys down 1.96%, while Nifty Metal declined 2.21%, the sharpest sectoral fall.
Nifty FMCG fell 0.70%, Nifty Financial Services 25/50 declined 0.14%, Nifty Pharma lost 0.59% and Nifty PSU Bank fell 0.61%. Nifty Realty dropped 1.12%, while Nifty Healthcare and Nifty Consumer Durables also declined.
Nifty Private Bank was the only other major sector in positive territory, gaining 0.22%.
The broader market opened weaker, with Nifty 100 down 0.53%, Nifty 200 falling 0.54% and Nifty 500 declining 0.57%.
Nifty Midcap 50 fell 0.53%, while Nifty Midcap 100 declined 0.58%. The Nifty Smallcap 100 was down 0.75%.
India VIX, meanwhile, rose 4.19% to 11.13, signalling higher expected volatility as investors navigate geopolitical risks and the MSCI reshuffle.
The MSCI changes will be implemented at Monday’s close and take effect from September 1. The rebalancing is also the first major MSCI event under India’s new closing-auction mechanism, raising the possibility of sharp moves towards the end of the trading session.
With crude back above $90 and geopolitical tensions escalating, investors are likely to remain cautious even as stock-specific buying, particularly in HDFC Bank, provides some pockets of strength.
(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.)
– Ends
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SOURCE :- TIMES OF INDIA
