Sensex Falls 493 Points, Nifty Slips Below 24,200 As IT Stocks Drag

Indian equity indices ended lower on Tuesday as selling pressure across IT, realty, metal and FMCG stocks weighed on the benchmarks, while elevated crude prices and rising US bond yields kept investors cautious.

The Sensex declined 492.70 points, or 0.61%, to settle at 77,235.46, while the Nifty 50 fell 132.75 points, or 0.55%, to close at 24,154.90.

Asian Paints, Infosys, HCL Technologies, Tata Motors Passenger Vehicles and Wipro were among the biggest Nifty losers. Axis Bank, Max Healthcare, Grasim Industries, M&M and Power Grid Corporation were among the gainers.

IT, Realty And Metal Stocks Under Pressure

Sectoral performance remained weak, with the Nifty IT index falling 1.9%, while FMCG declined 0.7%, Realty slipped 1% and Metal fell 0.6%.

Auto, Media and Pharma were the only major sectoral indices to end higher.

The broader market also remained subdued. The Nifty Midcap index declined 0.4%, while the Smallcap index ended largely flat.

Vinod Nair, Head of Research at Geojit Investments, said crude oil remained the primary drag on market sentiment, while rising US bond yields and weak global cues prolonged the risk-off trend.

He said investor anxiety had increased as hopes for a Middle East resolution faded following the expiry of the temporary US-Iran ceasefire, raising concerns over renewed inflation.

"Elevated U.S. yields further reduced the attractiveness of emerging markets, and IT stocks led losses amid fears that persistently high interest rates could dampen global technology spending," Nair said.

Crude, US Yields Keep Rupee In Focus

Nair added that although domestic fundamentals remain supportive, sustained high crude prices and rising input costs could put pressure on recent earnings upgrades, prompting investors to remain cautious in the near term.

V K Vijayakumar, Chief Investment Strategist at Geojit Investments, said the rise in the US 10-year bond yield to 4.73% was slightly negative for the rupee, as higher risk-free returns in US bonds could encourage FIIs to sell Indian equities.

He also said the earlier-than-expected closure of the FCNR(B) scheme under the concessional swap window on August 31, instead of September 30, had surprised markets.

However, Vijayakumar said the move was unlikely to significantly affect the exchange rate, as sizeable inflows are expected during the remaining days of August and could take total inflows under the scheme above $70 billion.

He added that Brent crude rising above $91 a barrel following the escalation of the Middle East conflict was another negative factor for the rupee going forward.