Benchmark indices ended lower on Thursday, with the Sensex falling more sharply than the Nifty as heavyweight HDFC Bank came under pressure amid a report of a possible US class-action lawsuit. The decline came despite easing crude oil prices and gains in banking and metal stocks, while heightened volatility on the monthly derivatives expiry added to the pressure.
The BSE fell 539.35 points, or 0.70%, to 76,933.59, while the Nifty 50 declined 116.90 points, or 0.48%, to 24,090.85. The Sensex had opened at 77,576.76 and touched an intraday high of 77,694.97 before sliding to its low of 76,933.59. The Nifty moved between 24,297.45 and 24,090.85 during the session.
The sell-off intensified during the closing auction on the monthly derivatives expiry day. The Sensex’s indicative close had pointed to a decline of around 3.3% during the auction, while before the auction the Nifty and Sensex were down 0.31% and 0.37%, respectively.
HDFC Bank was among the biggest drags on the Sensex, falling 2.08%. Infosys, Bharti Airtel, NTPC, LT and M&M were other major laggards. At the other end, Kotak Mahindra Bank rose 1.71%, ICICI Bank gained 0.93% and Tech Mahindra added 0.80%. BEL and Adani Ports also ended higher.
The broader market also ended weaker, though the decline was less severe than in the large-cap space. Nifty 100 fell 0.43%, Nifty 200 declined 0.36% and Nifty 500 slipped 0.33%. Nifty Midcap 50 and Nifty Midcap 100 both fell 0.10%, while Nifty Smallcap 100 declined 0.13%.
India VIX, however, jumped 5.06% to 11.10, signalling heightened volatility.
Most sectoral indices ended lower. Nifty PSU Bank fell 0.94%, Nifty Financial Services Ex-Bank declined 0.82%, Nifty Midcap Financial Services slipped 0.85% and Nifty Media fell 0.89%. Nifty Metal declined 0.86%, while Nifty Oil & Gas lost 0.80%.
Nifty Auto fell 0.40%, Nifty FMCG declined 0.47% and Nifty IT slipped 0.32%. Nifty Financial Services 25/50 fell 0.51%, while Nifty Realty was down 0.06%.
Healthcare and consumer-oriented pockets offered some support. Nifty Pharma gained 0.84%, Nifty Healthcare rose 0.73%, Nifty Consumer Durables added 0.72% and Nifty MidSmall Healthcare advanced 0.68%. Nifty Private Bank also edged up 0.09%.
prices remained volatile amid developments around the Middle East. Brent crude was at $88.35 a barrel, up 0.58%, while WTI crude rose 0.12% to $82.33.
Vinod Nair, Head of Research, Geojit Investments Limited, said the market remained caught between expiry-related volatility and the lack of a diplomatic breakthrough in the Middle East. “Expiry-led volatility and the lack of a diplomatic breakthrough in the Middle East continue to keep markets range-bound in the near term,” Nair said.
He added that the moderation in crude oil prices and long-term bond yields was providing some relief on the inflation front. “While a degree of higher energy prices is largely factored into earnings expectations, the recent moderation in crude oil prices and long-term bond yields is supporting the inflation outlook,” Nair said.
Nair also highlighted continued support from foreign institutional investor flows and resilient earnings, particularly for mid-caps. “FII inflows and resilient earnings momentum remain supportive for Indian equities, particularly mid-caps, where several segments are relatively insulated from global uncertainties and continue to benefit from strong domestic demand trends,” he said.
Investors will now turn their attention to the US Federal Reserve Chair’s upcoming Jackson Hole address for signals on inflation, interest rates and the policy outlook, which could influence global risk sentiment and capital flows into emerging markets, Nair said.
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)