Nifty opens lower; pharma stocks bleed, auto sector shines

Benchmarks opened in the red on Wednesday morning, weighed down by rising crude oil prices and geopolitical tensions, even as selective buying in automobile stocks provided some support.

The Sensex, which closed at 77,470.11 on Tuesday, opened at 77,384.95 and fell to 77,064.40, down 405.71 points or 0.52 per cent in early trade. The Nifty 50, which had ended the previous session at 24,187.70, opened at 24,150.45 and slipped further to 24,081.50, down 106.20 points or 0.44 per cent, as of 9.18 am.

Among the top gainers on the Nifty 50, Bajaj Auto led with a rise of 2.27 per cent, with shares trading at ₹10,639.50 against a previous close of ₹10,403.50. Hindalco gained 0.79 per cent to ₹958.90, while state-run oil producer ONGC added 0.76 per cent to ₹251.80. Maruti Suzuki rose 0.54 per cent to ₹13,670, and Nestle India edged up 0.43 per cent to ₹1,458.10.

The pharmaceutical sector bore the brunt of the morning selloff. IndiGo was the top loser, falling 2.75 per cent to ₹5,159 against a previous close of ₹5,305. Cipla shed 2.04 per cent to ₹1,403.30, while Max Healthcare declined 1.73 per cent to ₹1,081.40. Sun Pharma fell 1.59 per cent to ₹1,930.70, and Dr. Reddy's Laboratories slipped 1.53 per cent to ₹1,187.50.

"The price correction in some of the leading banking names appears to be over. There is value in this segment," said Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited. "Dips in the market will provide buying opportunities in fundamentally sound stocks."

The early weakness tracked a weak opening signal from Gift Nifty, which was trading at 24,117, down 52 points ahead of the session. Gaurav Udani, Founder of ThinCredBlu Securities, noted that "Nifty is expected to open lower around 24,120, down nearly 70 points, indicating a cautious start amid mixed global cues." He added that "markets are also likely to remain influenced by ongoing quarterly earnings and global developments, keeping stock-specific volatility elevated."

Brent crude topping $92 a barrel, amid an eleventh consecutive night of U.S. strikes on Iran and Houthi threats of a naval blockade against Saudi Arabia, is a key concern for India. Rising oil prices carry direct implications for India's inflation and import bill. The IMF has separately flagged elevated oil prices and a weak monsoon as risks to India's growth outlook. "The continuing U.S.-Iran conflict and rising Brent crude price will continue to weigh on markets despite positive news on other fronts," said Vijayakumar.

On the domestic macroeconomic front, the Indian rupee appreciated 21 paise to close at 96.23 in the previous session, buoyed by FCNR deposit inflows that have crossed $20 billion. "Rupee is likely to remain stable, buoyed by positive news on the dollar flows from FCNR deposits," said Vijayakumar. The RBI also eased foreign ownership norms, while gold demand in the country remained strong, though FMCG margins continue to face pressure.

Globally, Wall Street rebounded overnight with chipmakers leading gains. The Nasdaq climbed 1.3 per cent, the S&P 500 rose 0.9 per cent, and the Dow Jones added 385 points. Micron Technology surged 12 per cent. In Asia, South Korea's Kospi surged over 5 per cent on the back of a 52.3 per cent jump in July exports driven by semiconductor demand. Japan's Nikkei edged up on bargain buying in tech stocks. In China, Ant International raised $1.2 billion, while a tech IPO boom continued with Zhongji Innolight targeting a major Hong Kong listing.

Shrikant Chouhan, Head of Equity Research at Kotak Securities, said a meaningful breakout will only be confirmed "if the Nifty surpasses 24,500 or slips below 24,000 on a closing basis." He added that the "preferred strategy remains unchanged: reduce weak long positions in the 24,350–24,450 zone, while selectively accumulating quality stocks on declines."

The India VIX declined 2.93 per cent to 12.6, indicating subdued volatility. Foreign Institutional Investors turned net buyers...