Indian Stock Market Opens Lower Amid Global Weakness and Rising Oil Prices
Indian stock indices fell sharply as global markets showed weakness and oil prices surged, with Sensex dropping 366 points at open.
Mumbai, October 22 (Daily Kiran) : The Indian stock market opened in the red on Thursday, reflecting weakness in Asian markets, rising crude oil prices, and concerns over increasing U.S. bond yields. The Sensex fell by 366.36 points, or 0.50%, to start at 73,343.33, while the Nifty 50 dropped 123.60 points, or 0.54%, to open at 22,687.75.
During the trading session, the Sensex touched a low of 73,005.11, and the Nifty 50 reached a day’s low of 22,554.85. Broader market indices also faced declines, with Nifty Midcap and Nifty Smallcap falling by 1.04% and 0.91%, respectively.
Sector-wise, most indices traded in the negative territory, with significant pressure observed in the auto, metal, and healthcare sectors. The Nifty Auto, Nifty Metal, and Nifty Healthcare indices recorded declines of up to 0.98%, while the Nifty Pharma index weakened by 0.78%. The FMCG, realty, cement, and financial sectors also showed widespread weakness.
Market experts noted that large-cap stocks have been performing better than mid-cap and small-cap shares in recent months. They highlighted growing concerns over high valuations in the broader market. “The recent strength in the broader market has primarily been due to liquidity rather than corporate earnings. This has led to many mid and small-cap stocks trading at expensive valuations, while large-cap stocks are available at relatively attractive levels. This imbalance is gradually correcting and may continue,” they said.
Experts pointed out that rising crude oil prices and persistently high U.S. Treasury yields pose external challenges for the market. This has resulted in many traders maintaining short positions despite institutional buying.
They recommended a sectoral rotation towards large-cap stocks with reasonable valuations as an optimal investment strategy. While results may take time, this approach could yield better returns for investors.
Technical analysts indicated that the recent sharp decline in the Nifty and the breach of the 22,700 mark raises concerns about a deeper market correction. They noted that the 22,590 level is a crucial support point for the Nifty. If this level holds, a recovery could be possible. However, a strong bullish confirmation would require the Nifty to return above 22,840.
On Wednesday, foreign institutional investors (FIIs) were net buyers, purchasing shares worth approximately ₹1,022 crores, while domestic institutional investors (DIIs) also recorded net buying of around ₹1,614 crores.
Asian markets also experienced pressure, with Japan’s Nikkei, Hong Kong’s Hang Seng, and South Korea’s Kospi falling by up to 2% in early trading. In contrast, U.S. markets showed a positive atmosphere on Wednesday, driven by gains in technology stocks, with the Nasdaq closing nearly 1% higher and the S&P 500 rising by 0.58%. Strong corporate results in AI-related stocks boosted investor confidence.
Meanwhile, Brent crude futures saw an increase of over 1%, trading around $110 per barrel. The rising oil prices are heightening inflation concerns, which are impacting investor sentiment.
