Indian Markets Drop 0.3% as US H-1B Visa Changes Hit Sentiment

Market Update at 10:15 AM: India's equity benchmarks opened lower on Wednesday as investors assessed the impact of US visa restrictions, while persistent foreign outflows and valuation concerns kept market sentiment subdued.

The Nifty 50 lost 0.36 per cent to 25,079.5, and the BSE Sensex shed 0.33 per cent to 81,826.1 as of 9:20 a.m. IST. Broader markets also struggled, with the Smallcap and Midcap indices falling around 0.4 per cent each.

The 50-stock Nifty has declined 1 per cent over the last three sessions, with information technology stocks driving this week's sell-off. The pressure came after the US imposed a USD 100,000 fee for new H-1B visa applications.

On Tuesday, the U.S. released a proposal aimed at reworking the H-1B visa selection process to favour higher-skilled and better-paid workers. Indians accounted for 71 per cent of approved H-1B beneficiaries last year.

Pre-Market Update at 7:30 AM: On Wednesday, September 24, equity benchmark indices Sensex and Nifty 50 are expected to see a muted start, tracking losses in global markets. At 7:14 AM, the GIFT Nifty was trading near 25,192, down by 51 points.

US Federal Reserve Chair Jerome Powell stated that the central bank must carefully balance the risks of high inflation and a weakening job market in upcoming interest rate decisions. Powell highlighted, “Near-term risks to inflation are tilted to the upside and risks to employment to the downside – a challenging situation.”

On Tuesday, September 23, Foreign Institutional Investors (FIIs) were net sellers, offloading equities worth Rs 3,551.19 crore. Domestic Institutional Investors (DIIs), on the other hand, continued their buying streak for the 21st straight session, purchasing equities worth Rs 2,670.87 crore.

The Sensex and Nifty 50 extended their losing streak to a third session on Tuesday, weighed down by selling in IT and private banking stocks. Persistent foreign fund outflows, driven by concerns over the sharp hike in US H-1B visa fees, also added pressure. After a volatile day, the BSE Sensex slipped 57.87 points, or 0.07 per cent, to close at 82,102.10, while the NSE Nifty 50 fell 32.85 points, or 0.13 per cent, to settle at 25,169.50.

Wall Street ended lower on Tuesday, snapping a three-day record-breaking run. Comments from Powell pointed to uncertainty on the pace of future rate cuts, though he acknowledged that valuations remain elevated. The Dow Jones Industrial Average declined 88.76 points, or 0.19 per cent, to 46,292.78. The S&P 500 lost 36.83 points, or 0.55 per cent, closing at 6,656.92, while the Nasdaq Composite shed 215.50 points, or 0.95 per cent, to settle at 22,573.47.

Gold prices hovered near record highs after Powell’s cautious remarks. As of 5:17 AM IST, spot gold was down 0.1 per cent at USD 3,762.78 per ounce. On Monday, MCX gold futures surged 1.74 per cent to hit an all-time high of Rs 114,179 per 10 grams.

WTI crude oil futures moved toward USD 64 per barrel and Brent crude futures advanced toward USD 68 per barrel on Wednesday, building on a 1.6 per cent gain from the previous session. The rise followed an industry report showing a decline in US crude inventories, intensifying supply concerns.

The US dollar index stayed near its weakest level in almost a week at 97.23, as traders continued to price in two additional interest rate cuts this year.

For today, Sammaan Capital, RBL Bank and HFCL will remain on the F&O ban list.

Disclaimer: The article is for informational purposes only and not investment advice.