The Indian benchmark indices opened higher amid rupee weakness on Wednesday as the Sensex started trade at 84,735.59 or 55 points higher and the Nifty opened trade at 25,871.60, up by more than 11 points.
In the pre-open session, around 9:01 AM, the Sensex was trading above 84,672 or 7 points lower and the Nifty was trading above 25,962 or 102 points lower.
The Gift Nifty was also trading at 25,917.50 or over 35 points lower at 8:42 AM on Wednesday.
In the previous session, the Sensex fell over 533 points to settle at 84,679 and the Nifty declined more than 167 points to settle at a week’s low of 25,860.
Rupee Slide Weighs on Market Sentiment
Indian equities slipped into negative territory as continued weakness in the rupee and sustained foreign fund outflows unsettled investors. The domestic currency breached fresh record lows, crossing 91 against the US dollar and touching 91.14 in intra-day trade on Tuesday, driven largely by persistent selling by foreign institutional investors (FIIs).
“Continued INR weakness to fresh record lows, driven by persistent FII outflows and subdued global sentiments, dragged domestic markets into negative territory,” said Vinod Nair, Head of Research at Geojit Investments Limited.
Risk-Off Mood Triggers Broad Selling
The breach of the 91 level against the dollar raised fresh macroeconomic concerns, reinforcing a risk-averse mood in the markets. Weak cues from Asia further added to global uncertainty, prompting investors to pare exposure and lock in profits across sectors.
“This combination prompted investors to reduce risk, triggering broad-based profit-booking, particularly across realty, financial services, metal and IT names,” said Ponmudi R, CEO of Enrich Money, an online trading and wealth tech firm.
Global Cues Add to Pressure
Global markets offered little support. Brent crude, the international oil benchmark, fell 1.54 per cent to USD 59.63 per barrel. Asian markets ended sharply lower, with South Korea’s Kospi, Japan’s Nikkei 225, Shanghai’s SSE Composite and Hong Kong’s Hang Seng all closing in the red. European markets were trading mixed, while US equities ended lower on Monday.
Institutional Flows Remain Mixed
On the flows front, FIIs continued to offload equities, selling shares worth Rs 1,468.32 crore on Monday, according to exchange data. In contrast, domestic institutional investors (DIIs) provided some support, buying stocks worth Rs 1,792.25 crore during the session.
