Indian benchmark indices, Sensex and Nifty, experienced a notable decline, primarily driven by a sharp sell-off in IT stocks, a fresh spike in crude oil prices, and persistent foreign fund outflows, signalling investor caution amidst global economic factors.
Photograph: Danish Siddiqui/Reuters
Key Points
- Indian benchmark indices, Sensex and Nifty, experienced declines, with the Sensex dropping 303.67 points and the Nifty falling 77.95 points.
- Heavy selling in IT stocks, including Tata Consultancy Services and Tech Mahindra, was a primary driver of the market downturn.
- A significant spike in Brent crude oil prices, jumping 3 per cent to USD 98.92 per barrel, also contributed to negative market sentiment.
- Persistent outflows from Foreign Institutional Investors (FIIs), who offloaded equities worth Rs 8,362.92 crore, further impacted the market.
- Geopolitical concerns and reassessments of global technology growth expectations led to intense profit booking in the IT sector after a recent rally.
Benchmark indices Sensex and Nifty closed lower on Wednesday after a day’s breather, dragged by heavy selling in IT stocks, a fresh spike in crude oil prices and persistent foreign fund outflows.
The 30-share BSE Sensex dropped 303.67 points, or 0.41 per cent, to settle at 74,346.17.
During the day, it tanked 1,157.24 points, or 1.55 per cent, to 73,492.60.
The 50-share NSE Nifty declined 77.95 points, or 0.33 per cent to end at 23,405.60. Benchmark indices had snapped a four-day falling streak to close nearly half a per cent higher in the previous session on Tuesday.
IT Sector Leads Decline
Among 30 Sensex firms, Tata Consultancy Services tumbled 8.43 per cent, followed by Tech Mahindra (6.23 per cent), HCL Tech (5.25 per cent) and Infosys (3.82 per cent). ITC, Eternal, Larsen & Toubro and Bajaj Finance were also among the laggards.
InterGlobe Aviation, State Bank of India, ICICI Bank and Trent were among the gainers from the blue-chip pack.
Brent crude, the global oil benchmark, jumped 3 per cent to USD 98.92 per barrel.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 8,362.92 crore on Tuesday, according to exchange data.
Market Sentiment and Global Factors
“Indian equities witnessed another highly volatile session today. Markets opened under pressure as geopolitical concerns, elevated crude oil prices, and a sharp sell-off in IT stocks weighed on sentiment,” Hariprasad K, Research Analyst and Founder, Livelong Wealth, said.
The key story of the day was the sharp correction in IT, he said.
“After a strong three-day rally, the sector witnessed intense profit booking as investors reassessed global technology growth expectations,” Hariprasad added.
Meanwhile, the US Trade Representative has proposed slapping 12.5 per cent additional duties on 54 countries, including India, for failing to prohibit the import of goods produced with forced labour.
The action follows investigations launched against 60 countries over what the USTR described as their failure to impose and effectively enforce bans on imports made with forced labour.
“The failure of our most important trading partners to address the importation of goods made with forced labour is unacceptable. This creates a dynamic where American workers are forced to compete globally on an unlevel playing field,” US Trade Representative Ambassador Jamieson Greer said in a statement.
International Market Performance
In Asian markets, Japan’s Nikkei 225 index and Shanghai’s SSE Composite index ended higher, while Hong Kong’s Hang Seng index settled lower. South Korean markets were closed due to a holiday.
Markets in Europe were trading mostly lower. US markets ended in positive territory on Tuesday.
