Sensex, Nifty Close Lower for Second Straight Session as Crude Oil, IT Stocks Weigh

Indian equity benchmarks closed lower for a second consecutive session on Wednesday, as firm crude oil prices and continued uncertainty over the reopening of the Strait of Hormuz kept investors cautious through the day.

The numbers

The BSE Sensex declined 187.90 points, or 0.24 per cent, to close at 77,966.35, while the NSE Nifty50 fell 35.75 points, or 0.15 per cent, to settle at 24,435.95. The session had opened on a firmer note, with the Sensex briefly adding over 100 points in early trade, before selling pressure in heavyweight stocks pulled the indices into negative territory by the close.

Broader markets were mixed. The Nifty MidCap index outperformed the headline indices with a gain of 0.28 per cent, while the Nifty SmallCap index slipped 0.18 per cent.

What dragged the market

Tata Consultancy Services, Max Healthcare Institute and Apollo Hospitals Enterprise were among the biggest drags on the Nifty. The Nifty IT index was the worst-performing sectoral gauge of the session, falling 1.54 per cent as technology shares came under sustained selling pressure. TCS shares alone tumbled sharply during the session, with traders also pointing to boardroom uncertainty at parent group Tata Sons following chairman N Chandrasekaran's resignation earlier in the day as an added drag on Tata group stocks.

Godrej Consumer Products was the standout mover of the session, plunging nearly 10 per cent and hitting its lower circuit in early trade after the company announced the resignation of managing director and chief executive Sudhir Sitapati.

Crude oil continued to climb, with prices extending gains toward the $90-a-barrel mark amid the continuing deadlock over reopening the Strait of Hormuz. Since India imports the vast majority of its crude requirements, sustained increases in oil prices tend to weigh on the rupee, widen the trade deficit and stoke inflation concerns, all of which keep equity investors on edge.

What worked

Buying interest in public-sector bank shares helped cap the market's overall decline. The Nifty PSU Bank index was the best-performing sectoral index of the day, advancing around 2 per cent. Market participants said the Nifty found technical support near its 200-hour moving average during the session before staging a partial recovery, and that the index also managed to close above its 20-day exponential moving average, a mildly encouraging signal for the near term.

What's next

Analysts flagged 24,400 as a key level to watch; a sustained break below that could open the door to a slide toward 24,180, while a decisive move back above 24,500 may help stabilise sentiment. Investor attention now turns to the US inflation report for July, due for release shortly, which is expected to shape expectations around the US Federal Reserve's next move on interest rates and could set the tone for global markets, including India's, in the sessions ahead.

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