Domestic equity benchmarks opened lower on Wednesday, down about 0.5 per cent each with information technology stocks leading losses as investors remained cautious amid higher crude oil prices and escalating tensions in the Middle East.
Nifty 50 opened more than 100 points lower at 23,522.05, while Sensex fell over 350 points to 75,216.22.
Sector-wise, Nifty IT fell 3 per cent which was the worst-performing sectoral index in early deals, while Infosys dropped 3.34 per cent, Tech Mahindra fell 2.73 per cent, HCL Technologies declined 2.60 per cent, Wipro lost 2.34 per cent and TCS fell 1.71 per cent.
Similarly, the Nifty MidSmall IT & Telecom fell about 2 per cent, while financial services, auto, private banks and oil & gas stocks were also trading lower.
Meanwhile, healthcare, consumer durables and metal stocks bucked the broader trend. Nifty Consumer Durables rose 0.38 per cent, Nifty Metal gained 0.39 per cent and Nifty Pharma advanced 0.27 per cent.
According to market experts, two strong headwinds were weighing on equities — Brent crude trading around $100 amid escalating US-Iran tensions and the booming IPO market drawing liquidity away from secondary-market stocks.
They noted that IPO listing gains which have risen to about 22 per cent since June are attracting retail and institutional investors even as Nifty’s year-to-date return remains negative. Foreign institutional investors have sold equities worth about Rs 2.84 lakh crore through exchanges so far this year while investing around Rs 36,000 crore in IPOs.
Experts cautioned investors against blindly subscribing to IPOs driven by fear of missing out saying that some issues could fall below their offer prices.
The 23,500-23,260-23,000 zone is in focus. Alternatively, consolidation near 23,500 or an early move above 23,650 could create conditions for short covering towards 23,860-23,900, as per analysts.
Additionally, Asian markets traded mixed with gains in semiconductor stocks supporting sentiment.
Moreover, crude oil prices rose for a fourth straight session after fresh Iranian attacks on US military assets escalated Gulf tensions.
(IANS Inputs)
