India's Nifty 50 closes at 5-month low on elevated oil prices, bond yields
- Nifty 50 ended 1.19% lower at 23,118.6, its lowest close in five months
Indian shares fell on Tuesday on concerns over elevated oil prices and global bond yields ahead of this week’s Federal Reserve meeting, while gains in IT and the country’s largest private lender, HDFC Bank, limited losses.
The benchmark Nifty 50 ended 1.19% lower at 23,118.6, its lowest close in five months, and the BSE Sensex shed 1.04% to 74,003.82. The indexes had opened about 0.8% higher after falling 4.8% in last five weeks.
The 50-stock index briefly fell about 2.2% during the closing auction session (CAS), extending losses of 0.96% after the end of continuous trading at 3:15 p.m. IST.
Fifteen of the 16 major sectors fell. The broader small-caps and mid-caps fell 2.4% and 2.1%, respectively.
Brent crude futures jumped 2% to $107.8 per barrel as Middle East worries deepened.
Yemen’s Iran-aligned Houthis launched a new wave of attacks on Saudi Arabia and were digging into positions on the western coast of Yemen along the Red Sea, Yemeni officials said.
Meanwhile, sovereign yields climbed further on Tuesday, led by the 10-year U.S. Treasury yield that hit a nearly two-decade high, while signs of discomfort deepened for borrowers and global investors.
The Fed, at meeting this week, is expected to hike rates due to rising inflationary pressures.
“Elevated oil prices, surging treasury yields and line-up on big IPOs explains much of the current market weakness. If U.S. hikes rate, it will propel India to do so as well as it will need to protect its currency,” said Arun Malhotra, fund manager at CapGrow Capital.
Heavyweight financials and auto stocks fell 1.8% and 2%, respectively.
IT stocks rose 2.2% following calls for a slowdown in AI development. India’s biggest software services companies, Tata Consultancy Services and Infosys, rose 2.3% and 3.8%, respectively.
IT stocks have lagged the market over the last year as new AI tools threatened their business models.
HDFC Bank rose 1.2% after it sent names of two CEO candidates to the central bank.
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