Sensex Falls Over 800 Points, Nifty Breaks Below 23,500 as IT Stocks Tumble

Indian equity benchmark indices witnessed another weak session on Wednesday, September 9, as concerns over rising crude oil prices and geopolitical tensions increased pressure on domestic equities. The sharp rise in Brent crude prices towards the $100 per barrel mark raised concerns for India, one of the world’s largest crude oil importers.

The Nifty 50 opened at 23,522.05 and remained range-bound during the initial part of the session. Although the index attempted a recovery during afternoon trade, selling pressure emerged in the final hour, pushing the index towards the day’s low.

The Nifty 50 closed at 23,431.50, declining 203.60 points or 0.86%, marking its lowest level in nearly 13 weeks. The Sensex also remained under pressure, ending 813.35 points lower at 74,764.23 and extending its losing streak to the third consecutive session.

The Bank Nifty followed the trend and ended 0.85% lower. Meanwhile, India VIX, which indicates market volatility, surged more than 6% and moved closer to the 12 level, reflecting increased investor caution.

Brent Crude Crosses $100 Amid Rising Geopolitical Risks

Crude oil prices witnessed a sharp recovery on Wednesday, with Brent crude moving above $100 per barrel for the first time since July. The rally was driven by increasing tensions in the Middle East and concerns over potential disruptions in global crude supplies.

The latest escalation involving the US and Iran raised fears of supply interruptions, particularly around the strategically important Strait of Hormuz. Reports of attacks involving oil tankers and military assets further intensified concerns among global investors.

Adding to supply worries, Iran-backed Houthi militants targeted energy infrastructure in Saudi Arabia, including the Jazan refinery, which has a processing capacity of around 400,000 barrels per day.

At the same time, improving Chinese oil demand has supported crude prices as refiners look for alternative sources from regions such as Africa, Canada, and Latin America amid uncertainty surrounding Middle Eastern supplies.

Rupee Slips Below 95 per Dollar as Oil Prices Rise

The Indian rupee came under pressure on Wednesday, slipping beyond the crucial 95 per dollar level as higher crude oil prices and geopolitical uncertainty weighed on sentiment.

With Brent crude crossing $100 per barrel, concerns increased over India’s import bill and current account position. The Reserve Bank of India (RBI) stepped in through dollar sales and reportedly conducted foreign exchange swaps to absorb excess rupee liquidity.

These measures helped limit the currency’s decline, with the rupee closing at 95.1050 per dollar after touching weaker levels during the session.

Broader Market Ended in Red

The broader market witnessed selling pressure, although the decline was relatively moderate compared with benchmark indices.

The Nifty Midcap 100 index declined 0.51%, while the Nifty Smallcap 100 index slipped 0.48%, indicating cautious participation among mid and small-cap investors.

Sectoral Performance: Nifty Metal Gained 1.79%; Nifty IT Plunged Over 3%

Sectoral performance remained largely negative, with only two out of the 11 major Nifty sectoral indices closing in positive territory.

The Nifty Metal index emerged as the top performer, gaining 1.79% and extending its recent rally. Jindal Stainless was among the key contributors, with the stock rising more than 6%.

In contrast, the Nifty IT index witnessed sharp selling pressure and declined 3.24% during the session. The fall was led by Coforge after concerns emerged following the resignation of Chairman O.P. Bhatt amid observations from an internal audit review.

The weakness spread across other technology stocks, including Infosys, Tech Mahindra, HCL Technologies, Mphasis, and Persistent Systems.

US Futures Point Towards Weak Opening

US stock futures remained under pressure ahead of Wednesday’s market opening, signaling a cautious start for Wall Street.
Dow Jones futures declined 0.38% to 52,632, S&P 500 futures slipped 0.21% to 7,664, while Nasdaq 100 futures fell 0.40% to 29,422.

Investors remained focused on elevated crude oil prices, geopolitical developments, and their possible impact on inflation and interest rate expectations.

European Markets Decline

European equities traded lower on Wednesday as investors remained cautious due to rising crude oil prices, geopolitical uncertainty, and weak global sentiment.

Germany’s DAX declined 1.37% to 25,637.64, while the UK’s FTSE 100 slipped 0.68% to 10,737.79. France’s CAC 40 also witnessed selling pressure, falling 1.58% to 8,186.64.

The decline reflected investor concerns regarding the impact of higher energy prices on inflation expectations and economic growth.