Sensex, Nifty slip as costly crude and IT selling weigh on sentiment

New Delhi: Equity benchmarks Sensex and Nifty fell in early trade on Tuesday as elevated crude oil prices and selling in IT stocks weighed on investor sentiment, interrupting the previous session’s gains.

The BSE Sensex traded at 73,316.21, while the NSE Nifty stood at 22,694.60.

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Infosys, Tata Consultancy Services, HCL Tech and Tech Mahindra were among the major drags. Hindustan Unilever and Asian Paints also declined. Bharat Electronics, Eternal, Maruti Suzuki and InterGlobe Aviation were among the gainers.

Crude and foreign outflows weigh

Brent crude eased 0.74 percent to USD 115 a barrel but remained elevated, keeping energy costs in focus.

Foreign institutional investors sold equities worth Rs 1,462.49 crore on Monday, according to exchange data.

V K Vijayakumar, Chief Investment Strategist at Geojit Investments, said Brent above USD 114 and US 10-year bond yields around 4.97 percent remained near-term obstacles for equities. However, improving corporate earnings and strong domestic fund inflows would continue to provide support, he said.

Fed outlook in focus

Investors were also awaiting signals from the US Federal Reserve’s policy meeting on the direction of interest rates.

Ponmudi R, CEO of Enrich Money, said elevated crude prices would keep sentiment cautious, while changes in the Fed’s outlook could influence Treasury yields, the dollar and foreign investment flows into emerging markets.

Hariselvan Radhakrishnan, Founder and CEO of HST Wealth, said the Fed’s inflation guidance would matter more than the widely expected decision to leave rates unchanged. A hawkish signal could push yields and the dollar higher, constraining emerging-market inflows, he said.

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Asian markets were mixed. South Korea’s Kospi and Japan’s Nikkei 225 traded sharply higher, while Shanghai’s SSE Composite and Hong Kong’s Hang Seng declined. US markets closed higher on Monday.

In the previous session, the Sensex gained 482.92 points, or 0.66 percent, to close at 73,606.75. The Nifty rose 153.20 points, or 0.68 percent, to 22,753.20.

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