Sensex and Nifty, India’s key equity indices, witnessed a decline during early trading on Wednesday, influenced by negative trends in global markets, alongside the impact of rising crude oil prices and the outflow of foreign funds. The BSE Sensex, comprising 30 shares, dropped by 281.18 points, or 0.38%, settling at 73,622.73, while the NSE Nifty, representing 50 shares, fell by 93.15 points, or 0.41%, reaching 22,360.15.
Among the constituents of the Sensex, 22 stocks experienced losses, with major contributors to the decline including Bharti Airtel, Nestle India, Sun Pharma, and IndusInd Bank. However, certain stocks such as Ultratech Cement, Tech Mahindra, Axis Bank, and Tata Steel managed to sustain positive momentum amidst the overall downturn. On the NSE Nifty, 38 shares were observed to be in the negative zone.
Chief Investment Strategist at Geojit Financial Services, V.K. Vijayakumar, attributed the market decline to rising US bond yields, impacting global equity markets. He noted diminishing expectations of a US Federal Reserve interest rate cut in July due to tight labor market conditions and concerns about crude oil-induced inflation. Furthermore, he highlighted the impact of reduced optimism regarding multiple rate cuts in 2024 on global equity markets, with potential continued selling by Foreign Portfolio Investors (FPIs) in India.
In addition to the domestic market scenario, Asian markets mirrored the negative trend, with Hong Kong’s Hang Seng and Japan’s Nikkei 225 registering notable declines. Meanwhile, China’s Shanghai Composite also experienced a downturn. The downtrend in global markets was compounded by losses in US and European markets on the previous day. Further affecting investor sentiment, foreign institutional investors offloaded equities worth Rs 1,622.69 crore on Tuesday, alongside a slight increase in global oil benchmark Brent crude to USD 88.99 per barrel.
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