The Indian stock market slipped into the red on Monday, with Sensex dropping around 383 points to close at 76,133 and Nifty 50 losing around 119 points to end at 23,779. According to reports from The Economic Times, this marks an extension of the four-week losing streak for both benchmark indices. The decline came as fresh escalation in the US-Iran conflict pushed oil prices higher, along with other factors that weighed on investor sentiment. US markets were closed on Monday for Labor Day, while European equities closed mixed with the STOXX 600 dipping 0.1% to 649.17. At 9:36 am, the BSE Sensex was down 170.94 points, or 0.22%, at 76,344.49, while Nifty 50 was down 52.85 points, or 0.22%, at 23,844.85. The weakness was broader than the headline indices suggested, with Nifty 100 falling 0.26%, Nifty 200 declining 0.24% and Nifty 500 slipping 0.21%.
IT stocks led the market decline, with Infosys shares crashing 4% to lead losses on Sensex, while Tech Mahindra, Tata Steel and Bajaj Finserv shares dropped nearly 2% each to follow. As reported by The Economic Times, UltraTech Cement, TCS, Trent, Asian Paints, SBI and Adani Ports shares fell more than 1% each, with L&T and Bharti Airtel gaining around 0.6% each bucking the trend. The sharp decline in IT stocks was driven by rising US rate-hike bets, with traders now pricing in roughly a 57% chance of a rate increase this month. Higher US rates could curb client spending, weighing on Indian IT firms that generate a significant share of their revenue from the United States. In early trade, the Nifty IT index fell 1.72%, making it the worst-performing major sectoral index. Among major stocks, Infosys fell 1.28%, HCL Technologies declined 1.49%, while Tech Mahindra was down 0.10% in the broader sectoral picture. TCS was also lower by 0.89%.
Nifty IT and Nifty Realty dropped around 2% each to lead losses among major sectoral indices, while Nifty Metal and Nifty PSU Bank indices fell more than 1% each. According to The Economic Times, Nifty Pharma meanwhile gained 0.75%. Broader markets closed mixed, with Nifty Midcap 100 index falling 0.16% while Nifty Smallcap 100 index was almost flat, declining 0.05%. India VIX rose 1.87% to 10.88, indicating increased volatility expectations. Out of 3,698 stocks that traded on NSE on September 7, 1,509 stocks witnessed advances, 2,084 saw declines while 105 stocks remained unchanged. Sectoral performance remained weak, with 14 of the 16 major sectoral indices trading lower in early trade. Nifty Media was down 2.67%, making it the biggest sectoral loser, while Nifty Metal declined 0.72%, Nifty Realty fell 0.67%, Nifty FMCG slipped 0.51%, Nifty PSU Bank fell 0.43% and Nifty Private Bank declined 0.27%.
Brent crude was trading at $97.13 a barrel, up 0.88%, while WTI crude was at $92.36 a barrel, up 0.96%, as reported by The Economic Times. For India, which imports a large share of its crude oil requirements, a sustained rise in oil prices can increase the import bill and put pressure on inflation and corporate margins. The impact is particularly visible in sectors such as aviation, paints and automobiles, where fuel or crude-linked input costs can have a direct impact on profitability. Nifty Auto index fell 0.18%, while Nifty Oil & Gas declined 0.31%. Asian Paints was among the biggest Sensex losers, falling 1.61%, while the stock has also been facing pressure from concerns over higher input costs.
Ponmudi R, CEO of Enrich Money, noted that the index snapped a four-session losing streak but continues to remain within a broader corrective and consolidation structure. According to the market expert, the 77,000-77,500 zone is likely to act as the immediate resistance area, followed by the stronger 77,700-78,000 region. A sustained breakout above 78,000 could strengthen the recovery structure and pave the way for the index to move towards 78,500-78,800. On the downside, 76,000 remains the immediate psychological support, followed by the 75,700-75,500 zone. Holding above these levels will be crucial to prevent further weakness, while a decisive break below 75,500 could intensify selling pressure. Hitesh Rathi, Technical Analyst at Angel One, said the 23,750-23,600 band remains an immediate and crucial support zone for the index, with a decisive daily close below this range potentially triggering further weakness. The P&F X-percent breadth indicator currently stands at 35%, suggesting the probability of an extended downtrend appears relatively low.
A major domestic factor behind the current market trend is the strong pipeline of IPOs. According to The Economic Times, there are eleven mainboard IPOs hitting the market this week, with mega IPOs from NSE and Jio also expected this month. Vijayakumar noted that investors are increasingly focusing on the primary market for potential listing gains as a large number of IPOs are set to hit the market in September. "The present focus is on the IPO market rather than the secondary market. This is likely to continue throughout September," he said. This comes at a time when Indian equities have already been facing pressure from foreign flows and global macro concerns. The combination of heavy IPO fundraising and a cautious secondary market can therefore keep liquidity conditions tight for existing stocks. Key factors to watch in the coming sessions will be crude oil prices, the US Federal Reserve's rate outlook, Middle East developments and the flow of money into the IPO market.
