Indian stock markets slipped into the red on Tuesday, with Sensex and Nifty extending losses after yesterday’s crash as rupee hitting fresh lifetime low, elevated oil prices and other factors spooked investors.
At 10.40 am, Sensex declined over 800 points to test the 75,200 level, while Nifty declined over 200 points to slip below 23,600. This came as India VIX, which measures volatility in markets, inched up slightly to 18.69. The losses wiped off more than Rs 5 lakh crore from the total market capitalisation of all companies listed on BSE, pulling it down to Rs 462 lakh crore.
IT stocks including Infosys, Tech Mahindra, TCS and HCL Tech were the top losers on Sensex, falling 2-3% despite the sharp weakness in rupee. Adani Ports, Maruti Suzuki, Asian Paints, ICICI Bank, Bajaj Finserv, Bajaj Finance, HDFC Bank, Hindustan Unilever and other stocks followed, falling around 1-2% each.
The bearish market sentiment was broad-based, with Nifty Smallcap 100 and Nifty Midcap 100 indices also slipping into the red. Sectorally, Nifty IT declined more than 2% to emerge as the top loser. Nifty Metal meanwhile gained more than 0.5%. Around 1,847 stocks declined and 737 stocks advanced, while 96 remained unchanged on NSE.
Investor mood was cautious amid continuing FII selling, weakening rupee, and uncertainties with global macro fundamentals, said Vikram Kasat, Head Advisory, PL Capital. He however added that domestic liquidity and improved market breadth continue to act as buffers. “Looking forward, the market trend will depend heavily on crude oil trends, global risk sentiment and institutional participation, while stock-specific movements will remain firm amid earnings season,” he further said.
Here are the key factors pushing markets down today.
1) Trump rejects ‘garbage’ peace proposal from Iran
US President Donald Trump said a ceasefire with Iran was “on life support” as the latter rejected a US proposal to end the war and stuck to a list of demands which Trump described as “garbage”. Iran has demanded an end to the war on all fronts, including Lebanon where US ally Israel is fighting against Iran-backed Hezbollah militants. Iran also demanded its sovereignty over the Strait of Hormuz, compensation for war damage, and an end to the US naval blockade, among other conditions.
Trump said Iran’s response threatened the status of a ceasefire that began on April 7. “I would call it the weakest right now, after reading that piece of garbage they sent us. I didn’t even finish reading it,” he told reporters. These developments further faded hopes for a sooner end to the conflict in the Middle East.
2) Oil prices above $105
Oil remained elevated as fading hopes for a sooner end to the Middle East conflict spurred worries over further prolonged closure of the Strait of Hormuz, a narrow 33-kilometre waterway connecting the Persian Gulf with the Gulf of Oman that handles over 20% of the world’s daily oil and gas shipments.
Brent crude gained around 1% to hover above $105 per barrel on Tuesday morning, while WTI Crude also gained nearly 1% to $99 per barrel.
3) Rupee hits fresh all-time low
Indian rupee dropped to a fresh all-time low on Tuesday as investors worried over the threats to the ceasefire and rally in oil prices, deepening worries over the economic hit to a net energy-importing economy. The Indian currency fell to 95.55 per dollar, down 0.2% from its previous close and breaching its previous all-time low of 95.4325 hit last week.
4) Bond yields soar
US Treasury yields inched higher up amid the latest geopolitical developments. The yield on benchmark US 10-year notes rose to 4.423% while the 30-year bond yield rose to 4.994%. The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose to 3.962%. Rising bond yields typically make bonds more attractive to investors, which in turn can lead to some downturn in markets.
5) FII selling continues
Foreign investors continued to remain net sellers of Indian equities, net selling shares worth Rs 8,438 crore on Dalal Street on Monday, according to data on NSE. This marked the fifth consecutive session of selling by foreign investors. While this does not reflect their behaviour today, persistent FII selling dampens sentiment.
6) Nifty F&O expiry day
Tuesdays mark weekly expiry for Nifty F&O contracts. Usually, such days see heightened volatility as traders often try to adjust their positions. “In today’s session, Nifty is expected to find immediate support near the 23550–23600 range, where some buying interest or recovery could emerge. However, any pullback rally is likely to face selling pressure near the 23800 mark, which has now turned into an important resistance level. Overall, the broader strategy remains “sell on rise,” though a short-term contra trade can be considered near the 23500–23550 support zone for an intraday recovery bounce,” said Vatsal Bhuva, Technical Analyst at LKP Securities.
(With inputs from agencies)
(Disclaimer: Recommendations, suggestions, views and opinions given by experts are their own. These do not represent the views of The Economic Times)
