Sensex, Nifty open lower amid global economic concerns

Indian stock markets opened lower on Monday, mirroring weak global sentiment as concerns over a potential US economic slowdown and upcoming inflation data weighed on investor sentiment. The benchmark Sensex fell 210.18 points to open at 80,973.75, while the Nifty dropped 28.75 points to 24,823.40.

Global markets tumbled on Friday following weaker-than-expected US jobs data, which reignited fears of a recession. The S&P 500 and Dow Jones saw their largest weekly declines since March 2023, while the Nasdaq recorded its biggest weekly drop of 5 per cent since January 2022.

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“The stock markets have taken a sharp bearish turn, with sentiment shifting from optimism about cooling US inflation to concerns over a potential US economic slowdown,” said Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd.

Foreign institutional investors (FIIs) turned net sellers on September 6, offloading equities worth Rs 620 crore. The India VIX, a measure of market volatility, surged 7.11 per cent to 15.21 levels on Friday, signalling heightened market fear.

Oil prices slumped to an 18-month low, with Brent crude falling 3 per cent to close at $71 per barrel. This could potentially benefit oil marketing companies and other sectors sensitive to crude prices.

Among sectoral indices, PSU Bank, Energy, and Oil & Gas faced the most selling pressure last week, declining by about 3 per cent each.

Top losers in early trade included ONGC (-3.40 per cent), Adani Ports (-2.10 per cent), Tata Steel (-1.96 per cent), Hindalco (-1.95 per cent), and NTPC (-1.82 per cent). On the flip side, Hindustan Unilever (0.85 per cent), SBI Life (0.73 per cent), and HDFC Life (0.67 per cent) were among the top gainers.

Market analysts advise caution in the current environment. “Traders holding long positions are advised to exit on any bounce, and fresh long positions should only be considered if the market holds above 25,000,” said Hardik Matalia, Derivative analyst at Choice Broking.

Investors are now eyeing key US inflation reports due on September 11th and 12th, followed by the Federal Reserve’s decision on September 18. The European Central Bank’s rate decision this week will also be closely watched.

Despite near-term volatility, some experts remain optimistic about India’s long-term prospects. “India has overtaken China in the MSCI EM Investable Market Index in September 2024, which may boost positive sentiment in the market,” noted Vikas Jain, Head of Research at Reliance Securities.

As markets navigate through uncertain times, investors are advised to remain vigilant and focus on high-quality stocks in defensive sectors like FMCG, Pharma, and IT.