Sensex falls over 650 points, Nifty below 24,300 as crude rises; Tata stocks drag after Chandrasekaran resignation

Indian benchmark indices extended losses on Wednesday, with the Sensex falling over 650 points and the Nifty50 slipping below the 24,300 mark, amid elevated crude oil prices, weakness in IT stocks and selling pressure in Tata Group companies following N. Chandrasekaran’s resignation as Tata Sons chairman.

The Sensex declined as much as 656 points, or 0.84%, to hit an intraday low of 77,497.93, while the Nifty50 dropped 206 points, or 0.84%, to 24,265.95.

At around 1:36 pm, the Sensex was trading at 77,621.08, down 533.17 points, or 0.68%, while the Nifty was at 24,293.40, lower by 178.30 points, or 0.73%.

Broader markets remained relatively resilient, with the Nifty Midcap 100 down 0.27% and the Nifty Smallcap 100 lower by 0.23%. India VIX, the volatility index, edged up marginally to 11.87.

Tata stocks lead fall

Tata Group stocks came under pressure after N. Chandrasekaran resigned as chairman of Tata Sons. TCS emerged as the biggest drag among the group stocks, falling as much as 5%. Tata Steel declined 1.96%, while Titan and Tata Motors fell 1.82% and 1.85%, respectively.

Other Tata stocks, including Tata Consumer, Tata Elxsi, Tata Communications, Tata Power, Trent, Voltas and Indian Hotels, also traded lower. Tata Chemicals, however, bucked the trend and gained around 2%.

The resignation added to the cautious mood in the market, particularly given Chandrasekaran’s central role in steering the Tata Group and its various businesses.

On the BSE Sensex pack, 25 out of 30 stocks were in the red, with Infosys, M&M and Adani Ports declining up to 2%.

On the other hand, NALCO emerged as the top gainer, surging 8.17%, followed by SBI, which rose 1.15%. NTPC gained 0.59%, while Power Grid and Asian Paints advanced 0.35% and 0.24%, respectively. IndiGo edged up 0.11%.

Crude oil weighs on sentiment

Rising crude oil prices remained another major headwind for equities. Brent crude has moved above $89 a barrel amid renewed geopolitical tensions and uncertainty surrounding the Strait of Hormuz.

Market participants remain concerned that persistently high crude prices could increase India’s import bill, put pressure on the rupee and complicate the inflation and interest-rate outlook.

“The market is defying a breakout on the upside and is moving sideways. The principal factor restraining a rally is the strengthening Brent crude, which has again moved above $89 level. The off-and-on U.S.-Iran skirmishes continue, with the latest attack by the U.S. military on a Panama-flagged container ship. Iran now appears to be hardening its stance on the opening of the Strait of Hormuz. This might keep crude prices elevated, constraining a rally in the market,” said V.K. Vijayakumar, Chief Investment Strategist, Geojit Investments.

IT stocks lead decline

The Nifty IT index was among the worst-performing sectoral indices, falling 2.33%. TCS was the biggest loser among Nifty50 constituents, while Infosys declined 1.89% and other IT stocks also remained under pressure.

On the other hand, the Nifty PSU Bank index gained 1.55%, supported by buying in public-sector lenders. SBI was among the few Sensex constituents trading higher, gaining around 1.15%.

The Nifty Metal index was also marginally higher, rising 0.09%, helped by gains in aluminium stocks.

Among sectoral indices, Nifty Consumer Durables fell 1.29%, while FMCG, Realty and Healthcare indices declined around 1% each. The Nifty Auto, Pharma, Financial Services, Private Bank and Oil & Gas indices also traded in the red.

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