Sensex, Nifty End Flat After Wild Swings as IT Stocks Offset Oil-Led Weakness

Mumbai, May 18:Benchmark indices ended largely flat on Monday after a highly volatile trading session, as strong buying in information technology stocks helped markets recover from sharp early losses triggered by surging crude oil prices, weak global cues and escalating geopolitical tensions in the Middle East.

The BSE Sensex rose 77.05 points, or 0.10%, to close at 75,315.04, while the NSE Nifty 50 gained 6.45 points, or 0.03%, to settle at 23,649.95. The indices had opened sharply lower and remained under pressure for most of the session before staging a late recovery led by heavyweight IT shares.

Broader Weakness

Broader market sentiment, however, remained distinctly weak. Declining stocks heavily outnumbered gainers on the NSE, with 2,891 shares ending lower against only 1,216 advances, reflecting widespread selling across sectors outside frontline technology counters.

IT stocks emerged as the biggest support for the benchmarks, helping cushion the impact of weakness in several economically sensitive sectors. Investors rotated into technology shares amid rising concerns over inflationary pressure and slowing global growth after crude oil prices surged to multi-week highs.

Selling Pressure

Meanwhile, auto, PSU banking, media and metal stocks witnessed heavy selling pressure. Shares of crude-sensitive companies such as oil marketing firms and airlines remained under stress as Brent crude climbed above $111 per barrel following a drone strike on a nuclear facility in the United Arab Emirates and continued uncertainty surrounding the US-Iran conflict.

Metal stocks also traded weak, with Tata Steel among the major laggards after its quarterly results and a brokerage downgrade weighed on investor sentiment. PSU banks slipped amid concerns that rising bond yields and macroeconomic uncertainty could impact the broader financial sector.

Volatility remained elevated throughout the day, with India VIX jumping nearly 4.5%, indicating heightened nervousness among traders. Investors also remained cautious after the Indian rupee weakened to a fresh record low against the US dollar, intensifying concerns over imported inflation and foreign fund outflows.

Fragile Cues

Global cues remained fragile as Asian equities broadly declined and US stock futures traded lower during Asian hours. Investors worldwide reassessed the impact of higher energy prices on inflation, corporate profitability and interest rate expectations.

Despite the weak undertone, selective buying in heavyweight IT and defensive stocks helped benchmark indices erase most of their losses by the close. The recovery highlighted continued domestic institutional support, although near-term sentiment is likely to remain volatile amid geopolitical tensions and fluctuations in crude oil prices.

Market participants are now expected to closely track developments in the Middle East, movement in global crude prices and upcoming earnings from major global companies for further direction.

Source:

• NSE
• BSE