Sensex Falls Over 500 Points, Nifty Slips 0.4% As NBFC Stocks Decline On RBI's Draft Lending Norms
· Free Press Journal
Indian equity markets opened on a weak note on Friday as selling pressure in financial stocks dragged benchmark indices lower.
Investor sentiment was affected by concerns over the Reserve Bank of India’s draft lending norms and a rise in crude oil prices amid renewed uncertainty over shipping activity in the Strait of Hormuz.
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While Sensex declined 503 points during early trade, Nifty slipped over 100 points to 24,529.
At 10:20 am, the BSE Sensex was trading 363 points lower, down 0.46%, at 78,590, while the NSE Nifty50 declined 53 points, or 0.22%, to 24,582.
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The biggest pressure came from heavyweight financial counters, with Bajaj Finance and Bajaj Finserv emerging as the worst performers among Sensex stocks. Bajaj Finance declined 4.52%, while Bajaj Finserv fell 3.27% after investors reacted negatively to RBI’s proposed lending regulations.
Market participants are concerned that the new norms could impact certain revolving credit products offered by non-banking financial companies (NBFCs).
The weakness spread across the financial sector, pulling the Nifty Financial Services index down 0.68% and the Nifty Financial Services Ex-Bank index lower by 1.24%.
Other major laggards included ICICI Bank, Bharti Airtel, Eternal, Maruti Suzuki and UltraTech Cement.
Rising crude oil prices also added to market worries. Brent crude increased 1.19% to $83.47 per barrel, while West Texas Intermediate (WTI) gained 0.98% to $78.05 per barrel. Prices climbed after renewed concerns over restrictions on vessels passing through the Strait of Hormuz, a key global oil shipping route.
Higher crude prices are considered negative for India as the country depends heavily on imports to meet its energy requirements, potentially impacting inflation and corporate profitability.
IT Stocks Provide Support
Information technology stocks emerged as the key support for the market. The Nifty IT index gained 1.65%, led by buying in major companies. TCS rose 2.30%, Tech Mahindra gained 2.20%, HCLTech advanced 1.54% and Infosys increased 0.92%.
Mahindra & Mahindra, NTPC and Sun Pharma were among other gainers in early trade.
The broader market remained relatively stable, with the Nifty Midcap 50 and Nifty Midcap 100 trading higher, while the Nifty Smallcap 100 edged lower. India VIX rose 2.36%, indicating increased volatility.
Investors will continue to monitor RBI’s lending regulations, crude oil movements, geopolitical developments and corporate earnings for further market direction.