Summary of this article
Crude oil prices rise back above $100 per barrel mark
Bank and financial services sector led losses in domestic market
Indian stock markets fell on May 8 tracking slump in global markets on renewed tensions in West Asia. Crude oil prices rose back up beyond the $100 per barrel mark which also triggered a fall in markets.
Both the benchmark Nifty and Sensex indices fell over 0.6 per cent in early trade tracking the negative cues. The Nifty was trading at 24,174.00 while the Sensex was trading down at 77,360.52 at the time of writing.
Fresh attacks between US and Iran threatened to derail peace talks between the two countries US said that they intercepted Iranian attacks and carried out defensive action while missile destroyers were deployed across the Strait of Hormuz, and emphasised that the US does not intend to escalate tensions any further. US is meanwhile awaiting Iran’s response to the updated proposal to reopen the Strait and end the over two month-long conflict. Overnight, US stock markets also fell as the International Energy Agency (IEA) warned that the ongoing war was disrupting around 14 million barrels of the global oil supply per day and said that any post-conflict production would also take time and likely proceed gradually.
The Indian rupee broke the two-day gaining streak and fell to 94.54 against the US dollar due to rise in crude oil prices. The dollar index recovered to 98.24 against its major peers.
Banks and financial services sector led losses in the market. Within sectoral indices, Nifty Private Bank fell the most, down around 1 per cent, while Nifty PSU Bank was down nearly 0.7 per cent. Oil and gas companies also slumped, with the Nifty Oil & Gas index falling 0.9 per cent. Meanwhile, IT and Telecom stocks outperformed broader market sentiment. The Nifty IT index was up nearly 0.7 per cent. Healthcare and pharmaceutical companies also rose during the session, with the Nifty Midsmall healthcare sector up 0.7 per cent.
Within the Nifty 50 index, Apollo Hospitals’ shares rose the most, gaining 2.2 per cent. Asian Paints, Adani Ports, Tata Consumers, and Nestle India were also among the top gainers on the index. Meanwhile, HDFC Bank led losses in the Nifty, falling nearly 1.8 per cent. Among other losers were Bajaj Finance, Axis Bank, Ultratech Cement, and Coal India.
Meanwhile, broader market indices outperformed the Nifty index. The Nifty Midcap 100 index touched all-time highs on May 7 and traded nearly flat. Smallcap indices led gains, up around 0.2 per cent, similar to the Nifty Midcap 50 index.
“Nifty is currently placed around the upper band of the last 10 sessions' trading range, 23,800-24,400. Going ahead, a breakout and a close above 24,400 will open further upside towards the 24,600 and 24,800 levels in the coming weeks. Stock-specific action will continue to remain in focus as we progress through the quarterly earnings session. Failure to move above 24,400 will signal extension of the last 10 sessions' consolidation in the range of 24,400-23,800. Short -term support is placed at 23,800 levels, being the almost identical low of the last two weeks,” Bajaj Broking said in a note.
