Stock markets snapped their previous session’s rally on Wednesday, with the Sensex and Nifty closing in the red as rising crude oil prices, sustained foreign investor outflows and caution ahead of key US inflation data weighed on sentiment. Investors also booked profits after Tuesday’s sharp gains, while stronger information technology stocks limited the losses.
The BSE Sensex fell 251.89 points, or 0.34%, to close at 72,781.89. The index opened at 73,049.76 and moved between an intraday high of 73,195.26 and a low of 72,578.75.
The NSE Nifty 50 declined 99.25 points, or 0.44%, to settle at 22,622.70. The index opened at 22,715.75 and traded in a range of 22,558.95 to 22,757.95 during the session.
The decline came a day after both benchmarks gained around 1.6%, supported by information technology stocks and hopes of a possible review of long-term capital gains (LTCG) tax and securities transaction tax (STT) following Finance Minister Nirmala Sitharaman’s comments.
Information technology stocks remained among the market’s strongest performers, extending gains from Tuesday’s rally. The Nifty IT index rose 1.14%, after climbing 5.22% in the previous session.
Infosys was the top Sensex gainer, rising 2.51%, while Tech Mahindra gained 2.20% and TCS advanced 1.54%. HCLTech rose 0.61%. The gains followed strong investor interest in the sector after HCLTech’s quarterly profit beat expectations.
The Nifty FMCG index gained 1.21%, while the Nifty Media index rose 0.59%. Oil and gas stocks also advanced, with the sectoral index gaining 1.04%. The Nifty PSU Bank index rose 0.26%, while consumer durables gained 0.20%.
However, losses across several heavyweight stocks dragged the benchmarks lower. Bajaj Finance fell 2.55%, Bajaj Finserv declined 1.99%, Eternal dropped 1.68% and ICICI Bank lost 1.54%. Indigo fell 1.50%, while Sun Pharma declined 1.14% and Larsen & Toubro dropped 1.06%.
The Nifty Auto index fell 0.93%, while the Nifty Financial Services 25/50 index declined 1.21%. Metals, private banks, real estate and healthcare stocks were also under pressure.
The broader market performance was mixed. The Nifty 100 fell 0.34%, the Nifty 200 declined 0.29% and the Nifty 500 slipped 0.24%. The Nifty Smallcap 100 lost 0.32%, while the Nifty Midcap 100 edged down 0.08%. The Nifty Midcap 50, however, rose 0.14%.
India VIX, the market’s volatility gauge, climbed 3.39% to 14.60, signalling an increase in expected market volatility.
Crude oil remained a key concern for investors, with Brent crude rising to around $106.37 a barrel and US West Texas Intermediate crude trading at $95.32. Supply concerns intensified after reports that two vessels were struck in the Strait of Hormuz, adding to uncertainty over energy flows.
Higher oil prices are a concern for India because the country relies heavily on imported crude. A sustained rise can increase the import bill, add to inflationary pressures and complicate the outlook for interest rates and the rupee.
Investors were also awaiting US inflation data for clues on the Federal Reserve’s interest-rate trajectory. Higher US interest rates can make emerging markets such as India less attractive to overseas investors by improving the relative appeal of dollar-denominated assets.
Foreign portfolio investors extended their selling streak to 13 consecutive sessions on Tuesday, taking year-to-date outflows to a record $32.52 billion, according to the figures cited in market commentary.
Vinod Nair, Head of Research at Geojit Investments Limited, said Indian equities witnessed a volatile session as investors booked profits after recent gains and turned cautious ahead of key US inflation data.
He said sentiment received some support from rupee appreciation following the Reserve Bank of India’s foreign exchange measures, along with expectations of a possible review of LTCG tax and STT.
However, a higher-than-expected domestic wholesale price inflation reading pushed bond yields higher, reviving concerns about the monetary policy outlook and weighing on automobile stocks, private banks and metals.
Nair added that encouraging business updates from IT, FMCG and PSU banks reinforced investors’ preference for companies with stronger earnings visibility amid a challenging macroeconomic environment.
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