The markets opened lower on Monday as investors turned cautious amid rising crude oil prices, renewed tensions between the US and Iran and growing expectations of a possible US Federal Reserve rate hike.
The BSE Sensex fell more than 400 points, while the Nifty 50 slipped below the 23,900 mark in early trade. The Nifty remained close to the crucial 23,800 level as selling pressure was visible across several sectors.
The weak opening came despite mixed signals from global markets. Investors remained focused on developments in the Middle East, particularly the possibility of prolonged tensions affecting oil supplies. The uncertainty has added to concerns over inflation and economic growth at a time when global markets are already closely tracking interest-rate decisions.
Bharat Electronics (BEL) and Bharti Airtel emerged among the stronger performers in early trade, providing some support to the benchmark indices. However, their gains were outweighed by losses in several heavyweight stocks.
IT stocks were among the biggest losers, with Infosys falling 2.39 per cent, HCLTech declining 1.86 per cent, TCS slipping 1.19 per cent and Tech Mahindra losing 0.96 per cent.
The selling in technology stocks followed stronger-than-expected US employment data, which revived expectations that the US Federal Reserve could maintain a tighter monetary policy or raise interest rates in September.
For Indian IT companies, developments in the US are particularly important because the country accounts for a significant share of their revenue. Higher borrowing costs could make American businesses more cautious about discretionary spending, including technology and digital transformation projects.
The Nifty IT index fell around 2 per cent, making it one of the weakest sectors during the morning session. Most other sectoral indices also remained under pressure, pointing to broad-based weakness rather than selling confined to a few stocks.
Rising crude oil prices added another layer of pressure to Indian equities. Brent crude traded above $96 a barrel, with investors worried that continued US-Iran tensions could disrupt supplies and keep energy prices elevated.
Higher oil prices are particularly important for India because the country depends heavily on imports to meet its crude requirements. A sustained increase in global oil prices can raise India’s import bill, put pressure on the rupee and make it harder to contain inflation.
Corporate margins could also come under pressure, particularly for industries where fuel and transportation costs account for a significant portion of operating expenses.
The oil market is therefore likely to remain a key driver of sentiment on Dalal Street in the coming sessions.
With the Nifty trading close to 23,800, investors are watching the level carefully. The index has been under pressure in recent sessions, and traders will be looking for signs of whether the benchmark can hold this zone.
A sustained recovery could bring some stability back to the market, while a decisive move below the support level could increase selling pressure.
Foreign investor activity is another factor being closely monitored. Foreign portfolio investors sold around Rs 3,112 crore of Indian equities in the previous session, while domestic institutional investors bought nearly Rs 8,930 crore. Strong domestic institutional participation has helped cushion some of the selling from overseas investors.
Apart from BEL, Bharti Airtel and the IT majors, Tata Motors, RVNL, Lupin, NMDC, SBI, HUL and IndusInd Bank remained among the stocks in focus following company-specific developments.
The primary market also remained active, with Purple Style Labs making its stock market debut. The company’s shares listed below their IPO issue price, reflecting the more selective approach investors are taking towards new listings amid volatile market conditions.
The market remains caught between domestic buying support and a challenging global backdrop. Crude oil prices, US-Iran tensions, Federal Reserve rate expectations, foreign fund flows and global economic data are likely to determine the direction of Indian equities in the near term.
Monday’s session once again highlighted the importance of global cues for the Indian stock market. While BEL and Bharti Airtel provided some relief, sharp declines in Infosys, HCLTech, TCS and Tech Mahindra kept the broader market under pressure.