Indian equity markets came under pressure in early trade on Thursday as rising global bond yields and a stronger US dollar weighed on investor sentiment, offsetting the positive impact of softer crude oil prices.
At around 9.23 am, the Sensex was down 564 points, or 0.75 per cent, at 74,263, while the Nifty declined 205 points, or 0.88 per cent, to 23,240.
Broader markets also traded lower, with the Nifty Midcap 100 declining 0.95 per cent and the Nifty Smallcap 100 falling 0.66 per cent.
Most sectoral indices on the NSE were in the red, with only Nifty IT and pharma managing marginal gains. Nifty Financial Services 25/50 was the biggest laggard, falling 1.73 per cent, followed by private banks, which declined 1.67 per cent.
Market sentiment was pressured after the US 10-year Treasury yield moved above 5 per cent, raising concerns over higher borrowing costs and weighing on technology stocks. A stronger Dollar Index also added to pressure on emerging markets.
Meanwhile, Brent crude prices declined to around $97 a barrel after the US Energy Information Administration reported an unexpected 2.97-million-barrel rise in US crude inventories, against market expectations of a 0.6-million-barrel decline.
Global risk appetite has weakened amid rising US Treasury yields and uncertainty surrounding the US-Iran conflict. Investors are also closely watching the meeting between US President Donald Trump and Chinese President Xi Jinping for developments related to trade and technology.
In the previous session, the Nifty closed 0.50 per cent higher at 23,446 after opening mildly positive. Analysts placed immediate support for the index at 23,000–23,150, while resistance was seen at 23,450–23,500.
The Bank Nifty ended the previous session 0.60 per cent higher at 56,548. Its immediate support was placed at 56,000–56,200, while resistance was seen at 56,700–57,000.
Asian markets remained mixed. China’s Shanghai Composite fell 1.04 per cent, while the Shenzhen Composite declined 1.88 per cent. Japan’s Nikkei gained 1.33 per cent, South Korea’s Kospi rose 0.90 per cent, while Hong Kong’s Hang Seng Index declined 0.46 per cent.
Wall Street also closed lower in the previous session after stronger-than-expected US business activity data revived expectations of another Federal Reserve rate hike. The Nasdaq declined 1.13 per cent, the S&P 500 fell 0.75 per cent and the Dow Jones Industrial Average dropped 0.68 per cent.
On September 23, foreign institutional investors (FIIs) were net buyers of Indian equities worth Rs 1,617 crore, while domestic institutional investors (DIIs) bought equities worth Rs 2,341 crore.