Indian benchmark indices Nifty 50 and Sensex fell around 1% on Thursday, 24 September, as a sharp rise in crude oil prices and higher US bond yields weighed on investor sentiment.
The Nifty 50 declined 0.88% to 23,239.80, while the Sensex fell 0.80% to 74,223.26 as of 9:25 IST.
Brent crude surged above $102 a barrel, raising concerns over inflation and India’s import bill, while the US 10-year Treasury yield climbed to 5.11%, adding pressure on global equity valuations.
Financial stocks were among the key drags on the Nifty 50. HDFC Life, Bajaj Finance, Axis Bank, SBI Life Insurance, Shriram Finance, and Bajaj Finserv were among the top losers.
The NSE listing is expected to be the key market event today and could overshadow other developments. Experts said that if NSE shares are available at a reasonable valuation after listing, the stock could offer long-term investors an opportunity to add a blue-chip company to their portfolios.
Check the key factors weighing on the Indian stock market
IRDAI proposals put insurance stocks under pressure
Sentiment toward insurance stocks was further hit after the Insurance Regulatory and Development Authority of India (IRDAI) released a two-part consultation paper covering distribution regulations and Expense of Management (EoM) limits.
The proposed changes seek to curb high distributor payouts, lower costs for policyholders and shift the insurance industry away from an aggressive “push” sales model towards a more effort-based and customer-driven distribution framework.
Investors are assessing the potential impact of the proposed regulatory changes on insurers, distributors and their profitability, adding to the pressure on financial stocks during Thursday’s session.
Crude, bond yields remain key market headwinds
Dr V K Vijayakumar, Chief Investment Strategist at Geojit Investments, said the sharp rise in Brent crude above $102 a barrel and the US 10-year Treasury yield climbing to 5.11% remain key headwinds for Indian equities.
He said a sustained recovery in the broader market could remain difficult as long as crude prices and bond yields stay elevated.
Mid- and small-caps defy valuation concerns
Vijayakumar noted that mid- and small-cap stocks have continued to attract strong domestic liquidity, with investors accumulating growth-oriented stocks despite elevated valuations.
According to him, the strong flow of domestic liquidity into these segments has been a key factor behind their resilience, while large-cap stocks have remained relatively subdued despite more reasonable valuations.
He added that this trend could eventually reverse, with the timing largely dependent on the direction of crude oil prices and global bond yields.
Rupee plunge
The Indian rupee weakened further on Thursday, falling 11 paise to 95.84 against the US dollar in early trade as heightened geopolitical uncertainty pushed crude oil prices higher and supported US bond yields and the dollar.
According to PTI, forex traders said foreign capital inflows failed to provide meaningful support to the rupee, with selling pressure in domestic equities and a stronger US currency weighing on sentiment.
The rupee had closed 11 paise lower at 95.73 against the US dollar on Wednesday, reversing part of the 16-paise gain recorded in the previous session.
Meanwhile, the dollar index, which measures the greenback against a basket of six major currencies, was trading 0.06% higher at 100.87.
The rupee remains under pressure as investors track crude oil prices, global bond yields and developments on the geopolitical front.
Technical Views
Nifty outlook: Support at 23,200
SBI Securities Research said that following the gap-down opening, the Nifty 50’s immediate support is placed in the 23,230–23,200 zone. A sustained move below this range could extend the index’s weakness towards 23,050 in the short term.
On the upside, the brokerage sees immediate resistance for the Nifty in the 23,370–23,400 zone.
Sensex outlook: Support at 74,100
For the Sensex, SBI Securities Research identified immediate support in the 74,200–74,100 zone. A sustained break below this range could drag the index towards 73,700 in the short term.
On the upside, the brokerage sees immediate resistance at 74,500–74,600.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.irda
