The Indian equity markets ended the first trading session of the week on a weak note on Monday, August 31, with benchmark indices BSE Sensex and NSE Nifty50 declining as investors grappled with rising US bond yields and renewed expectations of higher interest rates following hawkish comments from US Federal Reserve Chair Kevin Warsh.
Renewed US-Iran tensions and a surge in crude oil prices above $90 a barrel also weighed on market sentiment.
The Nifty50 ended the session at 24,080.40, down 95.25 points, or 0.39%, while the Sensex settled 307.24 points, or 0.40%, lower at 76,957.27.
In the broader market, the Nifty Smallcap100 index declined 0.74%, while the Nifty Midcap100 managed to close 0.24% higher. Sectorally, the Nifty Metal index declined more than 2%, while the Nifty FMCG index fell nearly 2%.
Market breadth remained in favour of the bears. Of the 3,641 stocks traded on the NSE, 2,204 ended lower, while 1,340 advanced and 97 remained unchanged.
“Escalating tensions between the US and Iran have kept investors on edge, as fading prospects of a diplomatic breakthrough pushed crude oil prices and global bond yields higher. Rising crude oil prices and bond yields have renewed concerns over energy-led inflation and a higher interest rate environment, which could weigh on the earnings cycle,” said Vinod Nair, Head of Research, Geojit Investments.
“Meanwhile, the Fed chair's recent comments after the Jackson Hole address have increased expectations of a potential September rate hike, keeping global yields elevated and contributing to near-term volatility in emerging markets,” he added.
Despite these headwinds, stock-specific buying in the broader market supported a recovery from intraday lows, aided by expectations of healthy Q1FY27 GDP growth, festive-led demand and better GST collections, Nair said.
Here are today’s top gainers on the Nifty
Here are today’s top gainers on the Sensex
Here are today’s top losers on the Nifty
Here are today’s top losers on the Sensex
From a technical point of view, the Nifty50 index continues to remain weak as it trades below the critical moving averages. The index found initial resistance around the recent low. However, the RSI has formed a positive divergence on the hourly chart, indicating a possibility of a near-term pullback.
In the near term, the index may witness a minor pullback towards 24,180–24,200, said Rupak De, Senior Technical Analyst at LKP Securities. However, the higher levels, De believes, are likely to act as resistance.
“A sustained move above 24,200 could trigger a further rise of around 100 points. On the downside, support is placed at 23,990. A sustained break below this level could resume the correction in the market," De said.
