Nifty, Sensex Fall 0.70% as Brent Crude Nears $100

Market Update at 10:40 PM: Indian benchmark equity indices remained under pressure on Tuesday, September 8, as persistent Middle East tensions and elevated crude oil prices weighed on investor sentiment. At 10:49 a.m. IST, the Nifty 50 was down 88.75 points, or 0.37 per cent, at 23,690.40, while the BSE Sensex declined 364.57 points, or 0.48 per cent, to 75,768.24.

The weakness followed the benchmarks' six-week lows recorded in the previous session. Renewed hostilities between the U.S. and Iran have increased concerns over the stability of energy infrastructure and shipping routes across the Gulf, keeping investors cautious.

Iran warned on Monday that any fresh attacks on Tehran would invite retaliation against U.S. assets and cautioned that energy infrastructure across the Gulf, including U.S. oil and gas interests, remained vulnerable.

Brent crude futures rose around 0.6 per cent to nearly USD 98 per barrel, increasing pressure on oil-importing economies such as India. India imports around 85 per cent of its crude oil requirements, making the domestic market particularly sensitive to a sustained rise in global oil prices.

Higher crude prices and renewed U.S.-Iran tensions were keeping risk appetite subdued. Hitesh Tailor, Technical Research Analyst at Choice Broking, said the Nifty 50 could remain volatile around key support levels, while any recovery could face selling pressure at higher levels.

Sectoral performance remained weak, with 12 of 16 major domestic sectors trading lower. The financial sector declined 0.7 per cent, while private Banks fell 0.6 per cent. Among major index constituents, HDFC Bank declined 0.7 per cent, ICICI Bank fell 1.1 per cent and Reliance Industries slipped 0.6 per cent.

Broader markets also remained under pressure, with the Nifty Smallcap index and Nifty Midcap index declining around 0.3 per cent each.

Market Update at 09:30 AM: The Nifty 50 and the Sensex declined in early trade on Wednesday as Brent crude prices continued to rise, while there were no signs of a truce in West Asia, weighing on investor sentiment.

As of 9:18 AM, the Sensex fell 580.84 points, or 0.77 per cent, to 74,996.74, while the Nifty 50 declined 131.35 points, or 0.56 per cent, to 23,503.75.

Tech Mahindra, HCL Technologies and Infosys were the Top Losers on the Nifty 50 index, reflecting continued weakness in technology stocks.

In the broader markets, the Nifty MidCap 100 and Nifty SmallCap 100 were trading lower by 0.49 per cent and 0.30 per cent, respectively.

Among sectoral indices, the Nifty IT index declined over 3 per cent to emerge as the worst-performing index. In contrast, the Nifty Healthcare index outperformed the broader market.

Pre-Market Update at 7:40 AM: Indian benchmark equity indices are likely to open on a cautious note on Wednesday, September 9, as GIFT Nifty signals a weak start. GIFT Nifty was trading around 23,660, down 53.5 points or 0.23 per cent, indicating a negative opening for the domestic market. It was also reported around 23,630 in early trade against the Nifty 50’s previous close of 23,635.10.

The Nifty 50 closed 0.61 per cent lower on Tuesday at 23,635.10. Immediate support is seen around 23,600, while a sustained move above this level could trigger a recovery towards 24,000. On the downside, a break below 23,500-23,600 could intensify selling pressure.

U.S. equities ended lower on Tuesday amid renewed geopolitical tensions, rising crude oil prices and concerns over inflation and interest rates. The S&P 500 declined 0.58 per cent to close at 7,673.52, while the Dow Jones Industrial Average fell 1.18 per cent to 52,786.07. The Nasdaq Composite slipped 0.32 per cent to 26,421.41.

Rising crude prices towards the USD 100 per barrel mark remained a key concern for investors. Higher energy costs could keep inflation elevated and complicate the Federal Reserve’s interest-rate outlook ahead of key U.S. inflation data.

Concerns over the impact of artificial intelligence on software companies also weighed on U.S. equities, adding to pressure on the broader market.

Asian markets traded with a cautious-to-positive bias on Wednesday despite the weak U.S. market close. Japan’s Topix rose 0.2 per cent, Australia’s S&P/ASX 200 gained 0.1 per cent and Hang Seng futures advanced 0.2 per cent. S&P 500 futures were little changed, while Euro Stoxx 50 futures rose 0.1 per cent.

Asian chip stocks continued to gain amid sustained investor interest in the artificial intelligence trade. However, escalating Middle East tensions and the sharp rise in crude oil prices remained key risks for regional markets.

European markets ended mixed on Tuesday. The FTSE 100 declined 0.18 per cent to 10,811.66, Germany’s DAX slipped 0.15 per cent to 26,007.63, while France’s CAC 40 gained 0.47 per cent to 8,317.98.

The broader global market trigger remains the escalation of Middle East tensions, which has pushed crude oil prices higher and increased concerns over inflation and interest-rate trajectories.

Crude oil remained the biggest macro risk for Indian markets. Brent crude moved close to USD 99 per barrel, while WTI crude crossed USD 93 per barrel as concerns over supply disruptions intensified.

Oil prices rose for the fourth consecutive session and gained more than USD 1 in early Wednesday trade after Iran launched fresh attacks on U.S. military assets in the Gulf, escalating the conflict between Washington and Tehran.

Higher crude prices are negative for fuel-sensitive sectors such as aviation, paints and Logistics because of increased input costs. Upstream oil producers, however, could benefit from higher realisations.

Gold prices remained subdued as concerns over higher inflation and elevated interest rates reduced demand for non-yielding assets. International spot gold declined 0.4 per cent to USD 4,385.09 per ounce, while silver gained 0.3 per cent to USD 66.34 per ounce.

Gold prices eased further on Wednesday as escalating Middle East tensions raised concerns that higher energy costs could fuel inflation and keep interest rates elevated. Investors are also awaiting key U.S. inflation data due later this week.

The Indian rupee remained under pressure amid rising crude oil prices and geopolitical tensions. The rupee fell 18 paise to close at 94.74 against the U.S. dollar on Tuesday, compared with the previous close of 94.48 in another market update.

Higher crude prices could increase India’s import bill and exert additional pressure on the domestic currency.

The U.S. Dollar Index softened, while U.S. Treasury yields remained elevated. The U.S. 10-year Treasury yield moved close to 4.8 per cent, potentially keeping pressure on emerging-market capital flows.

Indian benchmark indices extended their decline on Tuesday. The Nifty 50 fell 0.61 per cent to close at 23,635.10, while the Sensex declined 0.73 per cent to 75,577.58.

Banking stocks and heavyweights, including ICICI Bank and Reliance Industries, contributed to the market decline. The Nifty 50 remained under pressure throughout the session and closed near the lower end of the day’s range.

Foreign Portfolio Investors were net sellers of Rs 123 crore in the cash segment on September 8, while Domestic Institutional Investors remained buyers with net purchases of Rs 1,350 crore.

The Nifty 50 continues to face resistance in the 23,800-24,000 zone. Immediate support is placed around 23,600, while the broader support zone remains at 23,500-23,600.

If the index sustains above 23,600, a recovery towards 24,000 and higher could emerge in the short term. However, a decisive break below 23,600 could increase selling pressure.

The broader trend remains cautious, with analysts noting that a sustained formation of higher highs and higher lows on the daily chart would be required to indicate a meaningful pause in the downtrend.

Bank Nifty has immediate support around the 51,000 level, while resistance is seen near 52,000. Market participants will closely track banking stocks for signs of recovery following recent selling pressure.

India VIX remained largely unchanged and settled at 11.16, indicating that near-term volatility expectations remained relatively contained despite the pressure on benchmark indices.

The Defence Acquisition Council approved procurement proposals worth Rs 1.1 lakh crore for the armed forces. Around 98 per cent of the acquisitions are planned from domestic sources, providing a positive trigger for Indian defence manufacturers and suppliers.

HAL, BEL, Data Patterns and Solar Industries are likely to remain in focus following the approval.

Brent crude approaching the USD 100 per barrel mark remains a major concern for the Indian economy and equity markets. Sustained higher crude prices could increase inflationary pressures, widen the import bill and weigh on the rupee.

Aviation, paints, logistics and other fuel-sensitive sectors could face margin pressure, while upstream oil producers may benefit from higher crude prices. Oil marketing companies such as BPCL, HPCL and Indian Oil will also remain in focus as investors assess the impact of elevated crude prices on marketing margins.

Foreign Institutional Investors (FIIs) turned marginal sellers in the cash market on September 8, offloading Indian equities worth Rs 123.19 crore. Domestic Institutional Investors (DIIs) continued to provide support, registering net purchases of Rs 1,349.64 crore during the session. 

Upcoming U.S. Producer Price Index and Consumer Price Index data will be closely watched for signals on inflation and the Federal Reserve’s future interest-rate trajectory.

Stronger-than-expected inflation data could reinforce expectations of elevated interest rates, potentially increasing pressure on global equities and emerging-market flows.

HAL, BEL, Data Patterns and Solar Industries are likely to remain in focus after the Defence Acquisition Council approved procurement proposals worth Rs 1.1 lakh crore.

Reliance Industries could remain under pressure amid crude oil volatility and weakness in benchmark indices.

ICICI Bank and HDFC Bank will be watched after banking stocks witnessed selling pressure during Tuesday’s session.

BPCL, HPCL and Indian Oil could remain in focus as investors assess the impact of crude oil prices approaching USD 100 per barrel.

Stocks in the F&O ban for Wednesday include SAIL, LIC Housing Finance, Inox Wind, Kaynes and Manappuram. Securities enter the F&O ban period when their open interest crosses 95 per cent of the market-wide position limit.

Defence stocks are likely to remain in focus following the Rs 1.1 lakh crore procurement approval. Oil and gas stocks could see divergent moves, with upstream producers potentially benefiting while oil marketing companies remain sensitive to margin concerns.

Aviation, paints and logistics stocks could remain under pressure due to higher fuel and input costs. Banking stocks will also remain important for the Nifty 50’s near-term direction.

With crude oil approaching USD 100 per barrel, geopolitical tensions escalating and global markets remaining cautious, domestic equities are likely to begin Wednesday’s session on a weak note. Investors will track crude oil prices, currency movements, foreign flows, U.S. inflation expectations and developments in the Middle East for further direction.

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

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