Indian equity benchmarks closed lower on August 26 as Nifty 50 fell 0.52% to 24,207 and Sensex declined 0.24% amid concerns over US sanctions on India-based companies over Iran's petroleum trade. The market decline was primarily driven by IT sector weakness, which fell 1.47% ahead of Nvidia's quarterly results. According to latest reports, the weakness extended to the broader market as investors assessed the impact of US sanctions on Indian firms engaged in Iran trade.
The IT sector emerged as the worst performer, declining 1.47% ahead of Nvidia's quarterly results, while Nifty PSU Bank, Nifty Oil & Gas and Nifty FMCG indices continued to underperform throughout the session. However, the Nifty Private Bank, Nifty Consumer Durables and Nifty Pharma indices traded with gains, providing some support to the market. As reported by Dalal Street Investment Journal, the Nifty Metal and Nifty Realty indices outperformed, while the Nifty Auto and Nifty Cement indices underperformed. The mixed sectoral performance reflected varied investor sentiment across different industry segments.
HDFC Bank remained under pressure following reports of a U.S. class-action lawsuit involving the lender and two senior executives, which affected investor sentiment. According to Dalal Street Investment Journal, Bharat Electronics was also in focus after fresh order-related developments. Bombay Burmah Trading Corporation witnessed strong buying interest following favourable developments. Meanwhile, ICICI Prudential AMC continued to attract investor attention amid reports that a promoter plans to sell a stake to comply with minimum public shareholding requirements.
The market decline was significantly influenced by US sanctions on India-based companies over Iran's petroleum trade, which rattled investor sentiment throughout the session. The weakness was further compounded by Nvidia's earnings results, which investors were closely monitoring for signals on the technology sector outlook. Crude oil prices declined with Brent crude futures falling 0.7% to USD 87.24 per barrel and West Texas Intermediate crude declining 0.7% to USD 81.67 per barrel, extending their losing streak to four consecutive sessions due to expectations of easing supply disruptions in the Strait of Hormuz.
Foreign institutional investors (FIIs/FPIs) turned net buyers in the cash segment on August 26, purchasing equities worth ₹502.63 crore. According to Dalal Street Investment Journal, domestic institutional investors (DIIs) remained strong buyers, recording net equity purchases of ₹6,425.16 crore. The market is likely to take cues from global equity trends, Nvidia's earnings, crude oil movements and developments in the Middle East, with investors closely monitoring signals from the Federal Reserve's Jackson Hole symposium for clarity on U.S. interest rate policy.
