SENSEX, NIFTY tumble on global recession fears

As anticipated, the domestic equity market opened on a weak note on Wednesday, driven by unfavourable global cues. At the opening of the market, the S&P BSE SENSEX stood at 81,962.85, a decline of 593 points or 0.72%, while the NSE NIFTY dropped by 192 points to 25,087.95. Investor sentiment was dampened following weak economic data from the U.S., which also led to a sharp downturn in Asia-Pacific markets. Japan’s Nikkei 225 was particularly hard-hit after a selloff in U.S. tech stocks raised fears of a recession.

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In the previous night’s trade on Wall Street, shares of AI giant Nvidia plummeted by 9.5%, marking the largest single-day loss in market value for a U.S. company. This decline, driven by lacklustre economic data, signalled that investors are becoming increasingly cautious about the prospects of artificial intelligence, which has been a major driver of stock market gains this year.

Additionally, oil prices continued their downward trend on Wednesday, extending the more than 4% drop from the previous day. The decline came amid expectations that a political dispute disrupting Libyan oil exports could be resolved, coupled with concerns over weakening global demand growth.

According to a Reuters report, “Brent crude futures for November fell 37 cents, or 0.5%, to $73.38 by 0330 GMT, following a 4.9% decline in the previous session. U.S. West Texas Intermediate crude futures for October were down 41 cents, or 0.6%, at $69.93, after a 4.4% drop on Tuesday.”

This slump in oil prices benefited oil marketing companies (OMCs) and other oil-dependent stocks, such as those in the paints and tyres sectors. For these industries, crude oil is a key raw material, so a decrease in its cost is seen as a positive development.

Among specific stocks, JK Tyre rose nearly 3% to ₹415.75 on the BSE, Apollo Tyres gained over 1% to ₹509, and CEAT shares increased by 1.60% to ₹2,893.45. Asian Paints was up nearly 2% at ₹3,210.05, and Kansai Nerolac Paints gained 1%.

In the OMC segment, Indian Oil Corporation (IOC) saw a 1% increase to ₹177.85 on the BSE, and BPCL shares also rose by over 1%.

IT Stocks Slumped

Sector-wise, IT stocks faced significant losses, reflecting the global weakness in tech shares. The BSE Information Technology index was down by 1.34% at 42,929.34 points, with major contributions to the decline coming from Infosys, TCS, Wipro, and Tech Mahindra.

On a more positive note, small-cap stocks bucked the overall trend, with the BSE SmallCap index trading 0.43% higher at 56,305.78. Meanwhile, the BSE MidCap index was slightly down, trading at 49,015.80, a decrease of 0.25%.