Market benchmark indices Sensex and Nifty declined in early trade on Tuesday amid persistently elevated crude oil prices and selling in IT stocks.The 30-share BSE Sensex declined 281.95 points to 73,316.21 in early trade. The 50-share NSE Nifty fell 63.15 points to 22,694.60.
From the 30 Sensex firms, Infosys, Hindustan Unilever, Tata Consultancy Services, Asian Paints, HCL Tech and Tech Mahindra were among the major laggards. Bharat Electronics, Eternal, Maruti and InterGlobe Aviation were among the winners. Brent crude, the global oil benchmark, traded 0.74 per cent lower at USD 115 per barrel.
“Brent crude remaining above USD 114 and the US 10-year bond yield hovering around 4.97 per cent continue to be near-term headwinds for the market. FIIs will remain in a risk-off mode in this adverse macro setting. However, the improving fundamentals of the corporate sector as reflected in Q2 earnings and the robust domestic fund inflows will continue to support the market,” V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 1,462.49 crore on Monday, according to exchange data. “Indian equity markets are likely to remain cautious amid persistently elevated crude oil prices, with WTI crude trading near the USD 101-per-barrel mark. Investor sentiment is also likely to remain cautious ahead of the US Federal Reserve’s policy decision, with markets looking for signals on the future interest-rate trajectory. Any shift in the Fed’s outlook could influence US Treasury yields and the dollar, with implications for foreign capital flows into emerging-market equities,” Ponmudi R, CEO of Enrich Money, an online trading and wealth-tech firm, said.
In Asian markets, South Korea’s Kospi and Japan’s 225 index traded significantly higher, while Shanghai’s SSE Composite index and Hong Kong’s Hang Seng index quoted lower. The US markets ended higher on Monday.
“The US Federal Reserve begins its two-day meeting today, and guidance on inflation will matter more than the widely expected unchanged rate decision. A hawkish signal could lift yields and the dollar and restrict emerging-market flows, while balanced guidance may allow the recent equity recovery to broaden,” Hariselvan Radhakrishnan, Founder & CEO of HST Wealth, a Research Analyst firm, said. On Monday, the Sensex ended 482.92 points, or 0.66 per cent, higher at 73,606.75. The Nifty rallied 153.20 points, or 0.68 per cent, to settle at 22,753.20.
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