Mumbai: Indian equity benchmarks opened lower on Thursday tracking weak Asian markets and concerns over elevated crude oil prices and high US bond yields.
Sensex opened 366.36 points or 0.50 per cent lower at 73,343.33, while Nifty began the trading session at 22,687.75, declining 123.60 points or 0.54 per cent.
Sector-wise, most indices traded in the red with auto, metal and healthcare shares leading losses in early trade.
Nifty Auto, Nifty Metal and Nifty Healthcare declined up to 0.98 per cent. Meanwhile, Nifty Pharma also slipped 0.78 per cent.
Broader weakness was also visible across FMCG, realty, cement and financial stocks.
Analysts said the recent trend of large-cap stocks outperforming mid and small caps appears to be gathering momentum as valuation concerns emerge in the broader market.
“The broader market resilience in recent months has been more a function of liquidity than earnings. This has created a paradox of overvalued mid and small caps coexisting with attractively valued large-caps. This trend is now getting corrected and is likely to sustain,” they said.
The eperts also pointed to external headwinds, including rising crude prices and elevated US Treasury yields which are encouraging traders to build short positions despite continued institutional buying.
“Sectoral churn towards fairly valued large caps is the ideal investment strategy now. It may take time, but this strategy will certainly be rewarded,” they added.
Technical analysts said the recent sharp decline and the breach of the 22,700 level on the Nifty raised the risk of a deeper correction.
“Recovery hopes rest on the ability of 22,590 to hold, but a move back above 22,840 will be needed to confirm renewed upside strength,” according to them.
On Wednesday, foreign institutional investors (FIIs) turned net buyers and purchased equities worth about Rs 1,022 crore. Domestic institutional investors (DIIs) also remained buyers with net purchases of around Rs 1,614 crore.
In Asian markets, major indices remained under pressure. Japan’s Nikkei, Hong Kong’s Hang Seng and South Korea’s Kospi dropped up to 2 per cent in early trading.
Overnight, Wall Street ended higher led by technology shares. The Nasdaq advanced around 1 per cent after strong corporate earnings boosted sentiment around artificial intelligence-related stocks, while the S&P 500 gained 0.58 per cent.
Meanwhile, Brent crude futures rose more than 1 per cent to trade around $110 per barrel, adding to inflation concerns and weighing on investor sentiment.
(IANS)
