Sensex, Nifty below 23,250 as financial stocks and rising crude drag market

At 9:41 am, the Sensex was trading at 74,192.25, down 636 points, or 0.85%, from its previous close of 74,828.25. The index opened at 74,272.40. The Nifty 50 was at 23,237.45, down 209.35 points, or 0.89%, after opening at 23,221.80.

In Short

• Benchmark indices opened sharply lower on Thursday
• Crude oil prices rose above $100 a barrel, pressuring markets
• Most sectoral indices and major Sensex stocks traded in red

Benchmark indices opened sharply lower on Thursday as a spike in crude oil prices above $100 a barrel and selling in financial stocks weighed on investor sentiment. Concerns around the Middle East conflict and a proposed overhaul of insurance commission rules also added pressure on the market.

At 9:41 am, the Sensex was trading at 74,192.25, down 636 points, or 0.85%, from its previous close of 74,828.25. The index opened at 74,272.40. The Nifty 50 was at 23,237.45, down 209.35 points, or 0.89%, after opening at 23,221.80.

The sell-off was broad-based, with 14 of the 16 major sectoral indices trading lower. The broader market also came under pressure, with the Nifty Midcap 50 down 1.41%, the Nifty Midcap 100 falling 1.19% and the Nifty Smallcap 100 declining 0.76%. India VIX jumped 9.90% to 11.37.

FINANCIAL STOCKS DRAG MARKET

Financial stocks were among the biggest drags on the benchmarks.

The Nifty Financial Services 25/50 index fell 1.56%, while the Nifty Private Bank index declined 1.76%. Financial Services Ex-Bank dropped 2.62% and the MidSmall Financial Services index fell 2.61%.

Among the major Sensex stocks, Bajaj Finance was the biggest loser, down 3.89%, while Axis Bank fell 3.66% and Bajaj Finserv declined 2.98%.

Kotak Mahindra Bank dropped 1.82%, HDFC Bank fell 1.39% and ICICI Bank declined 0.64%. SBI was down 0.75%.

The weakness in financial stocks came after the insurance regulator proposed changes to commission rules, including a cap on payouts, linking commissions to product complexity and spreading life insurers' commissions beyond the first year.

CRUDE OIL, MIDDLE EAST TENSIONS IN FOCUS

Crude oil remained another major concern for investors.

Brent crude was trading at $102.24 a barrel, down 0.81% in the latest market data, while WTI crude was at $91.43, down 0.79%.

However, Brent had risen above the $100 mark in the previous session after Iranian President Masoud Pezeshkian said at the UN General Assembly that Tehran would not surrender to US pressure.

The rise in oil prices has renewed concerns around inflation, India's import bill and corporate earnings.

Dr V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said, "The sharp spike in Brent crude above $102 and the US 10-year bond yield rising to 5.11% will weigh on the market today. So long as these two global headwinds remain, the prospects of a smart recovery in the market appear remote."

Investors are also closely watching the listing of the National Stock Exchange on Thursday.

The NSE IPO was subscribed 5.71 times and its shares are set to make their market debut today. The listing is expected to be a key event for investors, particularly after the primary market attracted significant liquidity during the recent period of weakness in the secondary market.

Vijayakumar said the market's focus would be on the NSE listing and that other factors could take a back seat during the session.

"If the NSE stock becomes available in today's trade at a fair price, that would be a good opportunity for long-term investors to have a blue chip in their portfolio," he said.

MOST STOCKS TRADE IN RED

Among the Sensex stocks, only a handful were trading higher.

ICICI Bank rose 0.64%, Tech Mahindra gained 0.51%, Tata Steel advanced 0.21% and HCLTech rose 0.20%. Sun Pharma and Titan were marginally higher.

On the losing side, Bajaj Finance fell 3.89%, Axis Bank 3.66%, Bajaj Finserv 2.98%, Kotak Mahindra Bank 1.82%, IndiGo 1.46% and HDFC Bank 1.39%.

Adani Ports, Asian Paints, Larsen & Toubro, Power Grid, Trent and Hindustan Unilever were also among the major losers.

Most sectoral indices were under pressure.

Nifty Financial Services Ex-Bank was the biggest loser, falling 2.62%, followed by MidSmall Financial Services at 2.61%. Private Bank fell 1.76%, Financial Services 25/50 declined 1.56% and PSU Bank dropped 0.86%.

Nifty Auto fell 0.67%, Metal declined 0.61%, Oil & Gas fell 0.71% and FMCG dropped 0.47%.

Nifty IT was down 0.21%, while Realty declined 0.39% and Consumer Durables fell 0.35%.

Nifty Media was marginally higher by 0.04%, while Pharma gained 0.05%.

(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.)

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