Indian equities struggled to hold on to early gains on Thursday as investors turned cautious ahead of the derivatives expiry, with weakness in heavyweight HDFC Bank pulling the benchmark indices lower.
The BSE Sensex opened 103.82 points higher at 77,576.76, while the Nifty 50 started at 24,277.60. The initial optimism, however, faded as selling emerged in large-cap stocks. Around the morning session, the Sensex was down about 0.12% at 77,379.50, while the Nifty slipped 0.06% to 24,191.85.
HDFC Bank was the biggest weight on the benchmarks, with its shares falling around 1%. The stock came under pressure following reports of a US class-action lawsuit involving the bank and two executives. Given its significant weight in both the Sensex and Nifty, the decline had an outsized impact on the overall market.
Among the stocks showing strength, Bharat Electronics was one of the notable gainers, rising around 1% after the defence electronics company announced new orders worth ₹730 crore. Bajaj Finance and several other financial stocks also found buying interest. Technology stocks received some support from the positive global cues, while selected metal and banking shares traded higher.
The broader market was not as weak as the headline indices suggested. Seven of the 16 major sectoral indices were trading higher, while the midcap and smallcap segments remained largely steady. This indicated that investors were still finding opportunities beyond some of the large-cap stocks under pressure.
Tata Power was among the prominent losers in early trading. Its shares fell around 4% after the company lost a $490-million arbitration challenge in Singapore. The development added to pressure on the power stock and made it one of the key names to watch during Thursday’s session.
ICICI Prudential Asset Management Company was another notable decliner, falling around 3.7%. The stock came under pressure after British insurer Prudential Plc announced plans to sell up to a 2% stake in the asset management company. The proposed stake sale raised concerns about additional supply in the market and weighed on investor sentiment towards the stock.
The movement in crude oil prices provided some relief to Indian investors. Brent crude declined around 0.5%, helped by signs of easing tensions in the Middle East. Iran and Oman were involved in negotiations concerning the Strait of Hormuz, while diplomatic efforts by Qatar were also aimed at reducing regional tensions. For India, lower crude prices are generally positive because the country imports a large portion of its oil requirements. A sustained decline could reduce pressure on the import bill, inflation and corporate costs.
Global technology stocks provided another positive signal. Asian technology shares gained after Nvidia reported stronger-than-expected earnings and offered an upbeat sales outlook. The development renewed optimism around artificial intelligence spending and supported technology stocks across global markets. However, the positive global backdrop was not strong enough to overcome domestic selling pressure in key index heavyweights.
Investors were also watching the rupee, foreign institutional investor flows and movements in US bond yields. The broader global interest-rate outlook remains an important factor for emerging markets such as India, particularly as investors assess where US monetary policy could be headed in the coming months.
The expiry of derivatives contracts added another layer of caution. Traders typically expect increased volatility around expiry as positions are adjusted and rolled over. The Nifty had already ended Wednesday’s session at 24,207.75, down 126.80 points or 0.52%, while the Sensex lost 183 points. The weak close had set a cautious tone for Thursday’s trading session.
The Nifty’s struggle to remain above 24,200 therefore remained a key level for traders. A sustained move below this mark could keep sentiment under pressure, while a recovery above the level may encourage selective buying. With the Sensex also finding it difficult to reclaim 77,500, market participants were likely to remain watchful rather than make aggressive bets.
Dalal Street is being pulled in different directions. Falling oil prices and stronger global technology stocks are providing a cushion, but selling in heavyweight banks and select corporate names is limiting the upside. Bharat Electronics, Bajaj Finance and other selected stocks are offering support, while HDFC Bank and Tata Power remain major drags. The market’s direction through the rest of the session will likely depend on expiry-related volatility, global cues, crude prices and institutional activity.