Nifty Crashes, Sensex Declines At Pre-Open Pointing To Lower Start For Benchmarks

Mumbai, October 1: Indian shares declined at pre open signalling a lower start for benchmarks as oil prices remained elevated despite some decline and foreign investors continued to offload stocks. 

Nifty 50 declined 0.8% while Sensex went down 0.4% at pre open.  

There was some relief on the US inflation front, however, after data showed consumer price pressures increased less than expected in August. Inflation in the previous month was also revised lower, potentially reducing pressure on the Federal Reserve to raise interest rates again in October. 

Foreign investors stepped up selling in Indian equities on Wednesday, offloading shares worth Rs 10,148 crore, according to provisional exchange data. The selling has gathered pace over the past five sessions, with foreign portfolio investors pulling out around $3.6 billion, taking their total outflows for the year so far to about $27.8 billion.  

The sustained overseas selling has added to pressure on domestic benchmarks. The Nifty 50 and BSE Sensex have declined 2.3% and 1.9%, respectively, so far this week, putting both indexes on course for an eighth straight weekly fall. Indian markets will remain closed on Friday on account of a local holiday.  

The latest bout of selling comes against a difficult global backdrop, with the seven-month-old Iran war pushing up crude oil prices and government bond yields. The rise in energy costs has renewed concerns over inflation and the path of interest rates, weighing on investor sentiment towards risk assets.  

Shares of Blue Dart Express could be in focus after the delivery and logistics company announced a 9-12% increase in prices across its domestic portfolio, effective January 1.

Aurobindo Pharma said its biopharmaceutical arm has launched ADQUEY (difamilast 1%) ointment in the US. The non-steroidal topical treatment is indicated for patients with mild-to-moderate atopic dermatitis. 

Asian markets mixed 

Asian equities were mixed on Thursday as investors remained cautious after a turbulent September, with elevated oil prices and rising global bond yields keeping risk appetite subdued. MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.06%, while South Korea’s KOSPI gained 0.6%. Japan’s Nikkei rose 2.4%, led by gains in chip-related stocks. 

The mixed performance came despite strong earnings from AI chipmaker Micron, suggesting investors remain cautious about the broader technology rally. 

US futures rise 

US stock futures pointed to a positive start, with Nasdaq and S&P 500 futures up 0.5% and 0.3%, respectively, in early Asian trade. The gains in futures followed a mixed session on Wall Street on Wednesday, with the Nasdaq Composite rising 0.24%, while the S&P 500 declined 0.25% and the Dow Jones Industrial Average fell 0.86%. 

Investor sentiment got some support from data showing the Personal Consumption Expenditures Price Index rose 3.4% annually in August, below the 3.7% increase economists had expected. The softer inflation reading reduced expectations of an October rate hike, although strong economic data and elevated Treasury yields continued to temper sentiment. 

Treasury yields stay elevated 

Bond markets remained a key concern for investors. The 10-year US Treasury yield touched 5.306%, its highest level since June 2007, while the 30-year yield remained near multi-year highs. 

The rise in long-term yields has kept investors cautious even as US equities have remained relatively resilient, with higher borrowing costs potentially weighing on economic growth and equity valuations. 

Oil prices remain elevated 

Oil prices remained elevated amid uncertainty over US-Iran peace talks and the outlook for Middle Eastern supplies. Brent crude futures were around $97.4 a barrel in early Asian trade, while West Texas Intermediate crude was at $89.7. 

Brent gained about 14% in September, its biggest monthly rise since July, while WTI rose around 5%. 

The oil market remained caught between lingering supply concerns and signs of recovering Middle Eastern exports. Saudi Arabia has resumed tanker loadings from Yanbu, while estimates suggest Gulf oil exports have recovered towards their 2025 average. 

Source

•  Exchanges