The stock market experienced a downturn on Wednesday, October 28, as significant selling in the information technology (IT) and oil and gas sectors, coupled with high crude oil prices, negatively impacted investor sentiment. The BSE Sensex concluded the day at 73,246.03, reflecting a decrease of 352.64 points or 0.48 per cent.

Meanwhile, the NSE Nifty 50 finished at 22,698.85, down 50.90 points or 0.22 per cent. During trading, the Sensex reached an intraday low of 72,603.57 before recovering some of its losses, while the Nifty also rebounded from its low of 22,497.70, aided by buying activity at lower price levels.

Pressure from IT and Oil Stocks

The IT sector faced considerable pressure as investors awaited the US Federal Reserve’s policy decision, evaluating the implications for interest rates and their potential effects on technology spending in the United States, a crucial market for Indian IT firms. The Nifty IT index declined by 1.98 per cent, with Infosys experiencing the steepest drop among major IT stocks, falling by 3.34 per cent.

Other notable declines included TCS, which decreased by 1.68 per cent, Tech Mahindra at 1.83 per cent, and HCLTech, which slipped by 1.13 per cent. Additionally, the oil and gas sector contributed to the market’s decline, with the sectoral index dropping by 2.27 per cent. Brent crude oil was priced at $114.45 per barrel, up 0.50 per cent, while WTI crude rose by 1.21 per cent to $101.11.

The rise in oil prices was attributed to Houthi attacks on Saudi Arabia, which raised concerns about possible supply disruptions, overshadowing diplomatic efforts aimed at stabilising the situation. Elevated crude prices are particularly concerning for India due to its reliance on imported oil, which poses risks to inflation and corporate expenses. Further declines were observed in the Nifty FMCG index, which fell by 0.56 per cent, while sectors such as metals and real estate also ended lower.

Support from Auto, Banking, and Pharma Stocks

Despite the overall market decline, buying in select heavyweight stocks helped mitigate losses. Larsen & Toubro (L&T) surged by 3.68 per cent, while Trent rose by 2.79 per cent, and State Bank of India gained 1.23 per cent. Other notable performers included Axis Bank, which advanced by 1.14 per cent, Indigo at 1.13 per cent, and HDFC Bank, which increased by 0.87 per cent.

The Nifty Auto index climbed by 1.45 per cent, while the Nifty Pharma index rose by 1.04 per cent. The financial services and private banking indices also saw gains of 0.45 per cent and 0.35 per cent, respectively, with media stocks advancing by 1.38 per cent. The broader market exhibited mixed trends, with the Nifty Midcap 50 rising by 0.54 per cent, the Nifty Midcap 100 gaining 0.43 per cent, and the Nifty Smallcap 100 advancing by 0.90 per cent.

However, indices such as the Nifty 100, Nifty 200, and Nifty 500 ended the day slightly lower. The India VIX, a measure of market volatility, decreased by 0.25 per cent to 16.36. Vinod Nair, Head of Research at Geojit Investments Limited, commented on the volatility in domestic equities, attributing it to the recent spike in crude oil prices and significant selling in IT stocks.

He noted that the rebound in oil prices was driven by renewed concerns over supply disruptions following the Houthi attacks, while investors were also monitoring the US midterm elections for insights into the geopolitical landscape. Nair highlighted that strong earnings from a leading capital goods company and resilience in banking, auto, and pharma sectors contributed to the recovery of benchmark indices from their early losses.

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