Benchmark equity indices Sensex and Nifty closed marginally higher on Monday after recovering from steep intraday losses, aided by value buying in information technology stocks and select heavyweight counters. However, gains remained limited due to persistent weakness in the rupee and rising global crude oil prices amid escalating geopolitical tensions in West Asia, traders said.
After a highly volatile trading session, the 30-share BSE Sensex ended 77.05 points, or 0.10 per cent, higher at 75,315.04. During the day, the index had plunged as much as 1,134.78 points, or 1.50 per cent, to hit an intraday low of 74,180.26 before staging a recovery in the latter half of the session.
Market breadth remained weak on the BSE, where 3,034 stocks declined, 1,264 advanced and 194 remained unchanged. The broader NSE Nifty also managed to finish in positive territory, inching up 6.45 points, or 0.03 per cent, to settle at 23,649.95.
According to market analysts, investor sentiment remained fragile due to a combination of global uncertainties and domestic macroeconomic concerns. Gaurav Garg, Research Analyst at Lemonn Markets Desk, said the markets witnessed a partial recovery from lower levels mainly because of value buying and selective strength in sectors such as IT and pharmaceuticals.
He noted, however, that the upside was capped by multiple negative factors including surging crude oil prices, continued weakness in the rupee near record lows and sustained foreign institutional investor (FII) outflows, all of which weighed heavily on overall sentiment.
Also read: Rupee declines to a record low of 96.17 against US dollar
Among the Sensex constituents, major gainers included Tech Mahindra, Infosys, Bharti Airtel, Bajaj Finserv, Sun Pharma, HCL Technologies, Bajaj Finance and Tata Consultancy Services. On the other hand, Tata Steel, Power Grid Corporation, State Bank of India and NTPC emerged as the biggest laggards during the session.
In the broader market, the BSE MidCap Select index rose 0.17 per cent, while the SmallCap Select index declined sharply by 1.62 per cent, indicating pressure in the broader market despite the benchmark indices recovering.
Sectorally, BSE Focused IT index rallied 2.53 per cent, while the broader IT index gained 1.95 per cent. Healthcare and Telecommunication stocks also ended with modest gains. In contrast, PSU Bank stocks fell 1.81 per cent, Auto declined 1.74 per cent, while sectors such as Consumer Discretionary, Metal, Consumer Durables and Oil & Gas also closed lower.
Ajit Mishra, Senior Vice President (Research) at Religare Broking Ltd, said the markets remained under pressure for much of the day due to weak global cues and rising geopolitical tensions in the Middle East. He pointed out that fresh hostilities involving the US and Iran heightened concerns over global energy supplies, leading to a sharp surge in crude oil prices.
Brent crude, the international oil benchmark, traded 0.73 per cent higher at USD 110.1 per barrel, intensifying fears over inflationary pressures, India’s current account deficit and margin stress for sectors heavily dependent on crude oil.
Currency markets also remained under pressure. The Indian rupee weakened for the seventh consecutive session and settled at a fresh record low of 96.35 (provisional) against the US dollar. Analysts attributed the decline to rising geopolitical risks, higher crude oil prices and expectations of prolonged high interest rates globally.
Nandish Shah, Deputy Vice President at HDFC Securities, said the sharp rise in both global and domestic bond yields reflected concerns over a prolonged high-rate environment. He added that worries surrounding a widening trade deficit and falling foreign exchange reserves further weighed on the rupee.
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