Nifty falls 0.4% as crude prices and FII selling keep markets cautious

Benchmark indices ended Wednesday on a mixed note, with the Sensex closing marginally lower while the Nifty slipped 0.42%. A recovery in several large-cap stocks and the broader market was offset by weakness in healthcare, pharma, metals and consumer stocks, while elevated crude prices and continued foreign investor selling kept sentiment cautious.

The Sensex closed at 72,480.29, down 48.78 points or 0.07%, while the Nifty 50 ended at 22,620.45, lower by 95.75 points or 0.42%.

The market had opened higher, with the Sensex gaining around 185 points in early trade, but the gains faded as the session progressed.

The broader market was relatively resilient. The Nifty Midcap 100 ended almost flat, while the Smallcap 100 gained 0.27%. The Nifty Midcap 50 was down just 0.01%, while the Nifty 500 fell 0.13%.

India VIX, the market's volatility gauge, rose 0.61%.

Among sectoral indices, Nifty Media was the top gainer, rising 2.74%, while Nifty Realty gained 1.62%. Nifty PSU Bank rose 0.54%, Private Bank gained 0.95% and Oil & Gas advanced 0.44%.

However, healthcare stocks remained under pressure. Nifty Healthcare fell 2.57%, while Nifty Pharma declined 1.84%. Nifty Metal fell 1.50% and Consumer Durables dropped 1.35%.BANKING AND IT STOCKS SUPPORT SENSEX

Several large-cap stocks gained during the session, helping limit the decline in the benchmarks.

Kotak Mahindra Bank rose 2.86%, ICICI Bank gained 2.31%, IndiGo advanced 2.05% and Axis Bank rose 1.41%.

Tech Mahindra, Hindustan Unilever, BEL and TCS were also among the gainers.

However, selling was seen in several heavyweight stocks. Eternal fell 2.31%, Sun Pharma declined 2.15%, Titan dropped 2.01%, Tata Steel and Adani Ports fell 1.76% each, while HDFC Bank declined 1.43%.CRUDE OIL AND FII SELLING REMAIN KEY RISKS

Brent crude rose 0.82% to $103.43 a barrel, while WTI crude gained 0.37% to $89.71. Higher oil prices remain a concern for India because of its dependence on crude imports and the potential impact on inflation, the rupee and corporate margins.

Foreign investor selling also continued to weigh on sentiment. FIIs sold Rs 9,980 crore worth of Indian shares on Tuesday, their biggest outflow in around four months. They have sold around $2.7 billion from Indian equities in September so far.

Vinod Nair, Head of Research, Geojit Investments Limited, said the relief rally lost momentum as investors booked profits at higher levels and oil prices rebounded.

"The relief rally loses its steam with profit booking at the higher levels, followed by a rebound in oil prices. The elevated global bond yields continue to remain a key overhang, limiting the scope for sustained risk-taking," Nair said.

He added that large-cap stocks, particularly in banking and IT, gained as investors looked for relatively attractive valuations and a higher margin of safety amid macroeconomic uncertainty.

"The overall market tone remains cautious; investors continue to monitor the trajectory of crude oil prices, bond yields, inflation expectations, and the potential implications for global monetary policy," Nair said.SEPTEMBER SET TO BE WORST MONTH SINCE MARCH

The Sensex and Nifty have now logged their steepest monthly decline since March, with foreign investors stepping up selling amid elevated oil prices, high global bond yields and concerns over inflation.

The rupee, however, gained 0.17% against the US dollar to 95.82. Despite Wednesday's recovery, the currency remains among the weaker-performing Asian currencies over the past month and quarter, with elevated crude prices adding pressure.

For the market, the next major triggers remain crude oil prices, FII flows, US bond yields and developments around the US-Iran conflict.

(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)- Ends

An engineer who swapped codes for headlines, Sonu Vivek is a product of IIMC Delhi with over three years of experience in the news room. Before joining India Today, he worked with ANI and TICE News. Born and raised in Bokaro, Sonu writes about personal finance, taxes, and stock markets. Basically, how you can make money and keep it. When he’s not simplifying budgets, he’s probably cheering for cooking or out playing some sport.