Sensex, Nifty Trade 0.25% Lower as Crude Oil Spike and West Asia Tensions Keep Bulls Cautious

Indian equity markets remained under pressure on Monday, although the benchmarks recovered sharply from their opening lows. At around 11:40 am, the BSE Sensex was trading at 77,376.98, down 192.41 points or 0.25 per cent, while the Nifty 50 stood at 24,137.55, lower by 69.35 points or 0.29 per cent. The Nifty had earlier slipped close to the psychological 24,000 level before IT stocks helped the market regain some ground.

The broader market also displayed a cautious trend. The Nifty Bank declined 173.45 points or 0.30 per cent to 57,872.45, with HDFC Bank, ICICI Bank and SBI trading lower. The Nifty Midcap 100 slipped 0.36 per cent to 62,810.25. The Nifty Smallcap 100 recovered most of its early losses and hovered near the flat line around the 11 am mark, indicating relatively better resilience among smaller companies.

Sectorally, Nifty IT emerged as the clear outperformer. The index gained around 0.50 per cent in early trade and strengthened further as TCS, HCL Technologies, Tech Mahindra and Infosys advanced between 1.58 per cent and 4.20 per cent. Nifty Pharma also traded marginally higher during the opening session as investors turned towards defensive stocks.

On the other hand, Nifty Auto and Nifty Metal led the decline, falling around 0.93 per cent and 0.88 per cent, respectively, during the morning session. Higher crude oil prices weighed on automobile companies, while weak global risk appetite triggered selling in metal stocks. Nifty Realty and Nifty FMCG also remained under pressure.

Among individual stocks, Just Dial surged around 13 per cent after reporting strong Q1 earnings and announcing the appointment of a new chief executive officer and chief financial officer. L&T Finance gained over 3 per cent after its quarterly net profit rose 29 per cent, while net interest income increased 28.4 per cent to Rs 2,924.8 crore.

TCS climbed 4.20 per cent to Rs 2,155.80, extending its post-results momentum amid fresh business deal announcements. In contrast, Avenue Supermarts fell more than 4 per cent Intraday after DMart’s like-for-like sales growth slowed and store additions remained modest during the June quarter.

Institutional activity was supportive in the previous session. On Friday, July 10, foreign institutional investors were net buyers of Rs 2,603.72 crore, while domestic institutional investors purchased shares worth Rs 2,019.68 crore in the cash market. Monday’s provisional figures will be available after the closing bell.

Global cues remained the biggest concern. Brent crude jumped around 4 per cent to nearly USD 79 per barrel, while WTI crude gained 4.40 per cent to USD 74.62 after renewed fighting between the US and Iran raised fears of disruption through the Strait of Hormuz. South Korea’s Kospi plunged around 8 per cent, briefly triggering a trading halt, while the US dollar strengthened against major currencies.

Going ahead, traders will closely track developments in the Strait of Hormuz, India’s inflation data and HCL Technologies’ quarterly earnings. For the Nifty, 24,200 to 24,300 remains the immediate resistance zone, while support is placed around 24,000, followed by 23,700 to 23,800. Volatility may remain elevated until crude oil prices stabilise.

This is Market commentary and not a recommendation to buy or sell any security.

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