Sensex slips over 100 pts, Nifty below Rs 24,050 as bank, pharma shares fall; small, midcaps see deeper cuts

Benchmark indices Nifty and Sensex opened lower on Tuesday, extending losses for a second session in a row, after a downturn in bank and pharma stocks and Middle East tensions dented sentiment on the bourses.

The Sensex opened 120 points lower at 76,838, while Nifty50 started the session down 52 points to hover near 24,028 levels. As for broader markets, the Nifty Smallcap 100 index also slipped, down about 0.2%, while Midcap index traded 0.81% lower.

On the 30-share Sensex, IndiGo, Bajaj Finserv, TCS, State Bank of India, Eternal, Axis Bank, and Sun Pharma were down up to 2%. On the gainers side, ITC shares rose almost 4%, followed by HCL Tech, Bharti Airtel, Kotak Mahindra Bank, and Asian Paints.

Expert views

V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said the Q1 GDP growth print of 7.8% was reassuring and indicated that India was on track to achieve 7% growth in FY27. He said growth of 10% in the services sector and 8.5% in the secondary sector reflected a robust economy that could deliver decent earnings growth in FY27.

According to Vijayakumar, this could help keep the market resilient, although global headwinds from elevated crude prices and high US bond yields could weigh on the market in the near term. He noted that the US 10-year bond yield at 4.77% and the 30-year yield at 5.24% were negative for equity markets, making a flight of capital towards safe US bonds inevitable in this environment.

Vijayakumar also pointed out that FIIs had sold equity worth Rs 13,025 crore in the cash market over the previous two days. He expects the Nifty's 23,000-25,000 range to hold in the near term.

FII/DII Tracker

On the institutional front, Foreign Institutional Investors (FIIs) sold equities worth nearly Rs 8,000 crore on August 31, while Domestic Institutional Investors (DIIs) were net buyers to the tune of Rs 4,586 crore.

Global Markets

Japan's Nikkei slipped 0.2% in early trade on Tuesday, while Hong Kong's Hang Seng fell 0.7%, as rising global bond yields and renewed fighting in the Middle East weighed on investor sentiment. The weak debut of clothier Shein Global also added to the cautious tone in Asian markets.

The 10-year US Treasury yield, a key benchmark for asset prices, climbed 2.2 basis points to a near 20-month high of 4.78%. Japan's 10-year benchmark yield was also approaching 3%, a level not seen for a generation.

US stocks ended lower on Monday as Wall Street closed out a volatile month, with a war-driven rise in crude prices reviving inflation concerns and increasing the likelihood of tighter monetary policy.

Higher oil prices weakened investor appetite for risk and pushed benchmark US Treasury yields higher, as markets assessed US Federal Reserve Chair Kevin Warsh's hawkish tone in his speech at the Jackson Hole Symposium on Friday. The Dow Jones Industrial Average fell 0.70%, the S&P 500 declined 0.33%, while the Nasdaq slipped 0.12%.

Crude Impact

Oil prices rose on Tuesday as renewed fighting between the U.S. and Iran in the Middle East revived concerns over potential supply disruptions from the world’s key crude-producing region.

U.S. President Donald Trump on Monday threatened further strikes against Iran after the two countries exchanged direct attacks for the first time in a month on Sunday. The development has heightened tensions in a conflict that had recently moved into an economic standoff.

Brent crude futures gained 70 cents, or 0.75%, to $91.20 a barrel, while U.S. West Texas Intermediate crude rose 93 cents, or 1%, to $87. The gains followed a strong session on Monday, when Brent settled 2.7% higher, while WTI ended up gaining 3% and briefly reached its highest level since August 21.

Rupee vs Dollar

The rupee opened at Rs 95 per dollar, compared with Monday’s close of Rs 95.16.


(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)