Indian benchmark stock indexes opened marginally lower on Monday, with Nifty 50 starting the session declining 14.55 points or 0.06% at 23,883.15 and Sensex opening 69.38 points or 0.09% lower at 76,446.05. According to Zee News, the decline was primarily driven by concerns over liquidity absorption from a busy initial public offering calendar and persistent tensions in the Middle East that have pushed crude oil prices higher. September futures on the Intercontinental Exchange were quoted at $96.73 per barrel, up 0.89%, as the US and Iran exchanged strikes involving tankers in the Strait of Hormuz. The GIFT Nifty had pointed to a subdued start for domestic equities, with Nifty futures quoted at 23,978, down 71 points, signalling a negative opening for the benchmark index.
Sectoral performance showed mixed trends with Nifty Media index falling 1.26% and Nifty IT index declining 1.15% leading sectoral losses in early trade. According to Zee News, Nifty Auto, Nifty Chemicals, Nifty Private Bank, Nifty FMCG and Nifty Cement indices were also in the red zone. However, Nifty Oil & Gas index rose 0.06% and Nifty Metal, Nifty PSU Bank, Nifty Realty gained up to 0.38%. Analysts noted that the equity market had been drifting lower for four weeks despite positive economic and corporate earnings news, with eleven mainboard IPOs hitting the market this week and mega IPOs expected this month that could absorb significant liquidity and divert investor focus from the secondary market. The NSE's India VIX rose 2.89% to 11.83, indicating increased market volatility amid the current geopolitical tensions.
The Nifty Realty index declined 1.77% to 875.50, marking a sharp reversal from its recent strong performance where it had jumped 4.64% in the six consecutive trading sessions. Major realty stocks experienced significant losses including Godrej Properties (down 3.21%), Brigade Enterprises (down 2.35%), DLF (down 2.33%), Anant Raj (down 2.18%), Prestige Estates Projects (down 2.11%), Sobha (down 1.84%), Aditya Birla Real Estate (down 1.78%), Oberoi Realty (down 1.71%), Lodha Developers (down 1.46%) and Phoenix Mills (down 0.57%). The selloff came despite the sector's recent strong momentum, indicating that investors were looking beyond near-term fundamentals and focusing on the potential impact of higher crude prices, inflation and borrowing costs on future demand. Higher crude prices are a negative for automobile companies as they can raise transportation and other input costs while increasing fuel expenses for consumers, with a sustained rise in fuel prices potentially weighing on vehicle affordability and demand, particularly in price-sensitive segments.
Technical experts provided key levels for the Nifty, with the downside marker at 23,860 remaining intact while the index faced resistance near 23,960. According to Zee News, the 23,800 level was seen as a key support with a break below it potentially opening the way towards the low 23,000s with an initial objective of 23,570. The 24,150-24,215 region remains a hurdle to be crossed before strength is confirmed. The US 10-year Treasury yield climbed to 4.79%, its highest in roughly 20 months, as traders increased bets on Federal Reserve rate hikes. Global markets also showed mixed signals, with Japan's Nikkei 225 up 2.23% and South Korea's Kospi gaining 3.04% in early trade, while US equities finished Friday's session in negative territory with the Dow Jones declining 0.51% and Nasdaq falling 0.29.
