Sensex, Nifty fall sharply at open; here's what's weighing on market; NSE listing in focus

Indian equity benchmarks fell sharply in early trade on Thursday, tracking weak global cues as elevated crude oil prices, rising US Treasury yields and renewed geopolitical concerns weighed on investor sentiment.

The 30-share BSE Sensex pack fell 577.67 points or 0.77 per cent to 74,250.58 in opening deals, while the NSE Nifty50 pack declined 196.15 points or 0.84 per cent to 23,250.65.

The broader market also came under pressure, with Nifty Midcap100 falling 1.04 per cent and Nifty Smallcap100 declining 0.81 per cent.

Among the major Nifty laggards, shares of HDFC Life Insurance Company Ltd, Bajaj Finance Ltd, Axis Bank Ltd, Bajaj Finserv Ltd and Max Healthcare Institute Ltd declined as much as 7.10 per cent.

Why are Sensex, Nifty falling today?

VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said the sharp rise in Brent crude above $102 a barrel and the increase in the US 10-year bond yield to 5.11 per cent were weighing on the market.

"As long as these two global headwinds remain, the prospects of a smart recovery in the market appear remote," Vijayakumar said.

He added that the recent market trend has been marked by sustained focus on mid- and small-cap stocks, with growth stocks in these segments witnessing continued accumulation despite elevated valuations.

According to Vijayakumar, strong domestic liquidity chasing mid- and small-caps has been a key factor behind the resilience of the segment, while large-caps have remained subdued despite what he described as fair valuations.

"This trend will change, but its timing will depend on the trend in crude price and bond yields," he said.

Vijayakumar also said the National Stock Exchange of India Ltd (NSE) listing would remain a key focus for investors during Thursday's session.

"Therefore, everything else will be pushed to the background. If the NSE stock becomes available in today's trade at a fair price, that would be a good opportunity for long-term investors to have a blue chip in their portfolio," he said.

Global market cues

Devarsh Vakil, Head of Prime Research at HDFC Securities, said the US 10-year Treasury yield had risen to around 5.06 per cent, its highest level since 2007, while the two-year yield stood at around 4.87 per cent.

"US equities fell sharply, snapping record runs, as the 10-year Treasury yield broke above 5 per cent," Vakil said.

He added that global sentiment had weakened after Wall Street ended lower amid rising US Treasury yields and an increase in the Dollar Index, putting pressure on emerging-market sentiment. Renewed uncertainty surrounding the US-Iran conflict has also contributed to risk aversion, he further said.

Nifty outlook

For Nifty, Vakil said the 23,500–23,600 zone would continue to act as a key resistance band, while the 23,100–23,150 range was expected to provide support.

"A sustained move above 23,600 would strengthen the bullish outlook, whereas a break below 23,100 could put renewed pressure on the index," he added.