SENSEX, NIFTY50 resume decline after a day's pause dragged by IT stocks

The Indian equity benchmarks resumed their downward journey on Monday, September 7, after a day's pause in the previous session as investor sentiment turned negative after crude oil prices moved higher as geopolitical tensions in West Asia escalated.

The SENSEX dropped as much as 545 points and NIFTY50 index touched an intraday low of 23,737 dragged down by weakness in index heavyweights like Infosys, Reliance Industries, State Bank of India, HDFC Bank, Tata Consultancy Services, Tata Steel and Eternal.

The SENSEX closed 383 points lower at 76,132.81 and NIFTY50 index declined 119 points to close at 23,779.15.

The 10-day moving average was 10 on Sunday, down from more than 15 on Friday and nearly 13 on Saturday. Only two vessels passed through the strait on Saturday, while six went through on Sunday, mostly using the Iranian route.

Iran's state media confirmed the strikes and said Tehran had attacked three US-affiliated vessels in response, as well as three oil tankers travelling through the Strait of Hormuz along an "unauthorised" route.

Back home, selling pressure was broad based as 13 of 15 major sector gauges compiled by the National Stock Exchange (NSE) ended lower led by the NIFTY IT index's 2.3% fall.

IT shares came under selling pressure on rising expectations that American corporations would cut down on their discretionary spending after stronger than expected August payrolls data from the United States increased chances of a rate hike by the Federal Reserve at its FOMC meeting due later this month, analysts noted.

NIFTY Bank, Financial Services, Metal Media, PSU Bank, Realty, Consumer Durables and Oil & Gas indices also fell between 0.4% and 2.8%.

On the other hand, pharma and healthcare shares witnessed buying interest.

Broader markets ended on a mixed note as NIFTY Midcap 100 index declined 0.5% while NIFTY Smallcap 100 index closed on a flat note.

Among the individual shares, PC Jeweller rose for a third straight session on Monday after the company last week said that it completed cleared and repaid all its outstanding debt under the terms of settlement agreement dated 30 September 2024 with respect to one more bank.

Paras Defence, Apollo Micro Systems, MTAR Technologies and Solar Industries among others surged up to 5% ahead of central government’s Defence Acquisition Council (DAC) meeting, which is estimated to yield a series of military procurement deals.

Infosys was top loser in the NIFTY50 index, the stock fell 3.76% to close at ₹1,087.50. SBI Life, HDFC Life, Jio Financial Services, Tech Mahindra, Ultratech Cement, Wipro, JSW Steel, Tata Steel and Bajaj Finserv also fell between 1.6% and 2.4%.

On the flip side, Apollo Hospitals, Larsen & Toubro, Coal India, Bharti Airtel, Max Healthcare, Cipla, Eicher Motors, Maruti Suzuki and Tata Consumer Products were top gainers in the NIFTY50 index.

The overall market breadth was positive as negative as 2,084 shares ended lower while 1,509 closed higher on the NSE.