Sensex Takes 417-Point Hit on Oil Concerns While Rupee Stages Comeback

Benchmark equity indices ended lower on Thursday after erasing gains made during the trading session, as investors assessed the inflation outlook amid a spike in oil prices and movements in bond yields that heightened concerns over potential rate hikes.

The Sensex declined 417.49 points, or 0.55 per cent, to settle at 76,152.86. The Nifty fell 41 points, or 0.17 per cent, to close at 23,873.45.

Commenting on the Nifty technical outlook, experts said on the upside, the 24,000 psychological mark remains the crucial resistance zone.

"On the downside, the 23,800 zone remains the immediate and crucial support level," an analyst stated.

"The index has so far managed to hold above this region, but a decisive break below 23,800 could intensify selling pressure and drag Nifty towards the 23,600 level," a market expert noted.

Market sentiment remained cautious as rising crude oil prices raised concerns about their potential impact on inflation, while movements in bond yields added to expectations that interest rates could remain elevated for longer.

Among the Nifty constituents, Bajaj Auto, Tech Mahindra and Trent emerged as the biggest laggards, weighing on the benchmark index.

However, broader markets showed resilience despite the weakness in the headline indices. The Nifty MidCap index gained 0.37 per cent, while the Nifty SmallCap index advanced 1.2 per cent.

Sectoral performance remained mixed. The Nifty Realty index was the biggest underperformer, declining more than 2 per cent during the session. The Nifty Media, Nifty Private Bank, Nifty PSU Bank and Nifty Bank indices also ended lower.

Meanwhile, the Nifty IT, Nifty Auto, Nifty FMCG and Nifty Healthcare indices underperformed the broader market.

Experts said that the session reflected continued caution among investors as markets weighed the competing factors of rising oil prices, inflationary pressures and the outlook for interest rates.

Meanwhile, Rupee remained strong at 94.48 against the dollar, supported by improved dollar liquidity as FCNR deposits of around $127 billion provide additional buffers to manage sharp currency movements and prevent a rapid fall in the rupee.

"Rupee is expected to maintain a positive bias, with the range seen between 94.25–95.00," an analyst noted.