Indian equities slid a per cent lower on Thursday amid weak global cues and the monthly F&O expiry.

The BSE Sensex closed 0.92 per cent, or 610 points, lower at 65,508, while the Nifty declined 0.98 per cent to 19,523. Market breadth was weak, with 1,504 BSE components advancing and 2,158 declining.

All of the Nifty sectoral indices ended in the red, with Nifty IT (2.2 per cent) and Nifty FMCG (1.9 per cent) retreating the most. Fear gauge Nifty VIX rose 10.7 per cent to 12.82 on Thursday.

“Global sentiments have dampened over a sharp rise in the Brent crude price, which touched almost $98/barrel, and US 10-year bond yields continue to hover above 4.5 per cent and at 16-year highs. Concerns over the likelihood of interest rates remaining higher for longer have been adding to the global overhang,” said Siddhartha Khemka, Head of Retail Research, Motilal Oswal Financial Services.

Elevated oil prices and higher interest rates could pose a risk to the earnings growth trajectory. India’s current account deficit widened to $9.2 billion, or 1.1 per cent of GDP, in the first quarter of FY24 from $1.3 billion, or 0.2 per cent of GDP, in the preceding quarter. The deficit was lower than $17.9 billion, or 2.1 per cent of GDP, in Q1FY23.

FPIs turned net sellers

Foreign institutional investors offloaded shares worth ₹3,364 crore on Thursday, provisional data showed. Domestic institutions bought shares worth ₹2,711 crore. FPIs have sold shares worth $1.7 billion in September (till Wednesday), turning net sellers after six months of sustained buying.

Vinod Nair, Head of Research at Geojit Financial Services, said: “The selling was broad-based, as investors are on alert given the rise of oil prices. If crude continues to stay above the $90 level, it will be a threat to inflation and boil the operational margins. Globally, US GDP data and the FED chief speech will be watched carefully, which will set the future trend. Currently, the combination of higher interest rates and US bond yields are influencing FIIs to stay in the selling mode.”

The dollar index was ruling above 106 levels on Thursday and is up 2.7 per cent in the last one month. Brent crude futures were down marginally at $95.9 a barrel after earlier climbing to their highest level in almost a year.

Asian indices

Asian indices traded mixed, with Hang Seng and Nikkei 225 losing over a per cent each. Global indices were on track for their longest losing streak in two years as high crude oil prices, the possibility of higher US interest rates, and concerns over China’s beleaguered property market dented sentiment.

Nifty has broken below the crucial weekly support of the 10-week exponential moving average (EMA) at 19,560 levels and closed lower. The index could slide down to its next support of the 20-week EMA, which is currently placed around 19,230 levels. The immediate resistance is at 19,700 levels.

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