The Indian equity markets posted notable losses early on Thursday amid renewed pressure from global bond yields, which is outweighing the supportive effect of softer crude prices.
As of 9:23 am, the Sensex declined 564 points, or 0.75 per cent, to reach 74,263, and the Nifty lost 205 points, or 0.88 per cent, to reach 23,240, marking a sharp reversal from the previous session's gains.
Broader Markets Track the Decline
Main broad-cap indices performed in line with the benchmark indices, as the Nifty Midcap 100 declined 0.95 per cent, and the Nifty Smallcap 100 lost 0.66 per cent, indicating that the sell-off was fairly broad-based across market capitalisations rather than concentrated in large-caps alone.
Sectoral Performance
Sectoral indices on the NSE traded in the red, except Nifty IT and pharma, which made marginal gains. Nifty Financial Services 25/50 was the top loser, down 1.73 per cent, followed by private banks, down 1.67 per cent, underscoring that financial stocks bore the brunt of the day's selling pressure.
Rising US Yields Weighing on Global Markets
The US 10-year Treasury yield moved above 5 per cent, pressuring technology stocks and weakening global risk appetite, a threshold that has repeatedly proven significant for market sentiment in recent sessions.
Crude Prices Ease on Inventory Data
Brent declined to around $97 after the US Energy Information Administration reported an unexpected 2.97-million-barrel increase in crude inventories, against expectations of a 0.6-million-barrel decline, a surprise build that pushed prices lower even as broader market sentiment remained weak overall.
A Broader Weakening in Global Sentiment
Global sentiment has weakened amid rising US Treasury yields and an increasing Dollar Index, adding pressure on emerging market sentiment, a combination of factors that has made it more difficult for markets like India's to sustain earlier gains.
Geopolitical and Diplomatic Factors in Focus
Renewed uncertainty around the US-Iran conflict has further increased risk aversion, while markets will also closely watch the meeting between US President Donald Trump and his Chinese counterpart, Xi Jinping, for trade and technology-related developments, adding another layer of geopolitical uncertainty that investors are monitoring closely.
Nifty's Technical Levels
In the previous session, Nifty closed at 23,446, up 0.50 per cent, after opening mildly higher. Immediate support is placed at 23,000-23,150, while resistance is seen at 23,450-23,500, giving traders a technical range to watch as the index navigates Thursday's sharper decline.
Bank Nifty's Position
Bank Nifty closed at 56,548, up 0.60 per cent in the previous session. Immediate support is placed at 56,000-56,200, while resistance is seen at 56,700-57,000, a range that will likely be tested given the sharp decline in banking and financial stocks seen in early Thursday trade.
Mixed Performance Across Asian Markets
In Asian markets, China's Shanghai index shed 1.04 per cent, and Shenzhen lost 1.88 per cent. Japan's Nikkei added 1.33 per cent, and Hong Kong's Hang Seng Index declined 0.46 per cent. South Korea's Kospi added 0.9 per cent, reflecting a genuinely mixed picture across the region rather than a uniformly negative tone.
A Weak Close on Wall Street
Wall Street closed lower after strong US business-activity data revived expectations of another Federal Reserve rate increase. The Nasdaq shed 1.13 per cent, the S&P 500 lost 0.75 per cent, and the Dow Jones shed 0.68 per cent, giving Indian markets a distinctly negative lead-in from US trading overnight.
Institutional Flows
On September 23, foreign institutional investors (FIIs) net bought equities worth Rs 1,617 crore, while domestic institutional investors (DIIs) bought equities worth Rs 2,341 crore, showing that both foreign and domestic investors remained net buyers even as broader market sentiment turned cautious heading into Thursday's session.
