Stock Market Today, August 7: The domestic equity market remained under pressure in noon trade on Thursday, with sustained selling in financial stocks dragging the markets lower despite continued strength
in IT and automobile shares. Investor sentiment also remained cautious ahead of the crucial US non-farm payrolls report due later in the day, while elevated crude oil prices kept risk appetite in check.
At around 12:05 pm, the BSE Sensex was trading 454.50 points, or 0.58%, lower at 78,500.26, while the NSE Nifty declined 86.85 points, or 0.35%, to 24,549.15.
The Nifty Financial Services fell more than 1.2%, while Financial Services Ex-Bank tumbled 1.6%. Private bank, healthcare, consumer durables, pharma, chemicals and cement indices also traded in the red.
On the other hand, the Nifty IT advanced over 1%, while Nifty Auto gained around 1.1%, supported by buying in automobile stocks. Oil & Gas and Media also traded marginally higher.
Key factors behind the market decline
Iran-US tensions keep investors on edge: Elevated geopolitical tensions in West Asia continue to dampen investor sentiment, with uncertainty over the Strait of Hormuz raising concerns about global energy supplies.
Brent crude extends rally: Brent crude rose for a third straight session to trade above $83 a barrel after Iran, in coordination with Oman, proposed new transit rules for the Strait of Hormuz, including restrictions on vessels deemed hostile and hefty penalties for violations. The move fuelled fears of supply disruptions, pushing oil prices higher. Elevated crude prices are negative for India, a major oil importer, as they can widen the trade deficit, stoke inflation and weigh on corporate earnings.
FII selling persists: Foreign Institutional Investors (FIIs) remained net sellers, offloading equities worth Rs 17.86 crore on Thursday. Continued foreign outflows added pressure on domestic equities and weakened overall market sentiment.
Weak global cues: Asian markets traded lower, with Japan’s Nikkei 225 and South Korea’s Kospi in the red, while Wall Street ended lower overnight. Weak US index futures further indicated a cautious global risk environment.
Financial stocks under pressure: Selling intensified in financial stocks on Friday, keeping benchmark indices under pressure. Bajaj Finance slumped more than 5.3%, while Bajaj Finserv fell over 4.1%. ICICI Bank lost around 2.5%, with Kotak Mahindra Bank, HDFC Bank, Axis Bank and Bharti Airtel also trading lower.
The weakness followed the RBI’s draft proposal on regulating certain revolving credit products offered by NBFCs, which raised concerns over the sector’s growth outlook.
India VIX rises: The India VIX climbed around 3% to 12.46, indicating increased investor nervousness and expectations of higher market volatility.
