The Indian stock market closed lower on Monday, with benchmark indices Sensex and Nifty falling as investors grappled with rising US bond yields and renewed expectations of higher interest rates following hawkish comments from US Fed Chair Kevin Warsh. Renewed US-Iran tensions and a surge in crude oil prices above $90 a barrel added to the pressure.
Sensex dropped over 307 points to end at 76,957 while Nifty 50 lost over 95 points to close at 24,080. Broader markets saw a sharper fall, with Nifty Smallcap 100 and Nifty Midcap 100 indices dropping up to 0.8%.
Adani Ports and ITC shares crashed around 4% each to lead losses on Sensex, while Bharti Airtel fell 3% and HDFC Bank, Infosys, Kotak Mahindra Bank, Tata Steel, NTPC, Bajaj Finance and Power Grid shares fell over 1% each. Bucking the trend, Sun Pharma, ICICI Bank and Axis Bank shares jumped around 2% while SBI and Bajaj Finserv shares were up over 1% each.
Among the sectors, Nifty Metal dropped more than 2% while Nifty FMCG fell nearly 2%. The overall market favoured the bears, with NSE seeing 2,204 declines against 1,340 advances, while 97 stocks remained unchanged.
What lies ahead for Dalal Street?
Escalating tensions between the US and Iran have kept investors on edge, as fading prospects of a diplomatic breakthrough pushed crude oil prices and global bond yields higher, said Vinod Nair, Head of Research at Geojit Investments. He noted that rising crude oil prices and bond yields have renewed concerns over energy-led inflation and a higher interest rate environment, which could weigh on the earnings cycle.
Meanwhile, the Fed chair's recent comments after the Jackson Hole address have increased expectations of a potential September rate hike, keeping global yields elevated and contributing to near-term volatility in emerging markets, according to the analyst. “Despite these headwinds, stock-specific buying in the broader market supported a recovery from intraday lows, aided by expectations of healthy Q1FY27 GDP growth, festive-led demand, and better GST collections,” he said.
Technical view on Nifty
Nifty continues to remain weak as it trades below the critical moving averages, said Rupak De, Senior Technical Analyst at LKP Securities. He noted that the index found initial resistance around the recent low. However, the RSI has formed a positive divergence on the hourly chart, indicating a possibility of a near-term pullback.
In the near term, the index may witness a minor pullback towards 24,180–24,200, the analyst said. However, he believes that the higher levels are likely to act as resistance. “A sustained move above 24,200 could trigger a further rise of around 100 points. On the downside, support is placed at 23,990. A sustained break below this level could resume the correction in the market,” according to the analyst.
(With inputs from agencies)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
