The Indian stock market had a weak start to the trading day of the week. Domestic markets are trading under pressure amid weak global cues. The Sensex opened down 177.83 points, or 0.24 per cent, at 72,460.87 as soon as the opening bell rang this morning. Nifty also could not recover. It opened trading down 62.25 points, or 0.28 percent, at 22,540.80. Around 10 am, the market saw a further decline and the Sensex fell by 373 points.
Sensex-Nifty slow, market opens in red
As soon as the market opened, the vigilance of investors was evident. Both the Sensex and Nifty are in a bearish mood. The advance-decline ratio also remained weak due to overall pressure in the market. Declining stocks outnumbered advancing stocks. Traders believe that global cues have dampened the mood in the domestic market. This decline does not seem to be confined to any one sector, rather its direct impact is being seen across many major stocks. Small investors are currently avoiding new deals due to weakness in the broader market.
Strong shine in IT stocks, TCS gains 2.5%
The IT sector has emerged as a strong shield amid this market slowdown. Good buying was seen in the shares of IT companies since morning. Most of the focus was on Tata Group giant TCS. Just ahead of the second quarter (Q2) financial results due today, shares of TCS jumped 2.5 percent. The market expects better performance from the company’s results. Along with TCS, there was a buying trend in big tech companies like HCL Tech, Tech Mahindra, Infosys. At the same time, Sun Pharma from the healthcare space also tried to support the market by showing strength.
Three main factors exert pressure on the market
The first major reason is the sudden rise in crude oil prices. Increasing attacks on ships in the Gulf region and the Strait of Hormuz have raised concerns about oil supplies from West Asia. Amid this supply crisis, global oil benchmark Brent crude has soared above $102 per barrel. India imports most of its crude oil requirements, so a rise in crude oil prices directly affects the stock market.
Another reason is the continued withdrawal of foreign institutional investors (FIIs). Foreign investors have been selling continuously in the Indian market for the past nine trading days. On Wednesday, October 8, FIIs also invested Rs. 6,121.37 crore worth of shares were sold. This continued heavy selling has put a lot of pressure on the domestic market sentiment.
The third reason is the weekly expiry of Sensex derivative contracts i.e. Futures and Options (F&O). On the day of expiry, traders rollover or close their positions, causing sharp fluctuations in the market.
Top gainers and losers list changes
Tech companies dominated the Nifty’s list of top gainers in early trading. Apart from TCS, HCL Tech and Tech Mahindra, shares of BSE Ltd and Trent gave relief to investors by taking profits. Buying was also seen in trends with a strong hold in the retail sector.
On the other hand, among the losing stocks, the Bajaj twins, the two Bajaj Group companies, were the worst hit. Bajaj Finance witnessed deep selling pressure. Apart from this, the shares of SBI Life Insurance, InterGlobe Aviation (Indigo), Shriram Finance and Max Healthcare also saw a sharp decline. Rising crude prices had an impact on aviation stocks, leading to declines in Indigo. The fall in these big stocks worked to drag the market down.
