Tracking a decline in Asian peers, Indian benchmark equity indices closed lower on Monday after succumbing to selling pressure in a volatile session. A pullback in financials after a recent rally weighed and fading hopes of an early US rate cut also hurt sentiment.

Indices were dragged by index heavyweight Reliance Industries, financial, and IT stocks.

The 30-share BSE benchmark Sensex declined 354 points or 0.49% to settle at 71,731. The broader NSE Nifty dropped 82 points or 0.38% to end at 21,771.

From the Sensex pack, Bajaj Finance and Bharti Airtel were the top laggards, falling over 3% each. Maruti, Bajaj Finserv, HCL Tech, and Titan also closed with cuts, while Tata Motors, Sun Pharma, Power Grid, and M&M closed with gains.

Among individual stocks, One 97 Communications or Paytm on Monday fell another 10% to its lower circuit limit at Rs 438.35 on BSE. In the last three trading sessions, including Monday, the stock has lost 42.4% of its value or Rs 20,500 crore in market capitalisation.

On the sectoral front, Nifty Consumer Durables fell 1.2%, while Nifty FMCG dropped 0.76%. Nifty Bank, Financial Services, FMCG, IT, and Media also closed lower, while Nifty Auto, Metal, Pharma, oil & Gas, Realty, and Healthcare closed higher.The market breadth was skewed in favour of the bears. About 2,131 stocks declined, 1,822 gained, and 144 remained unchanged on the BSE.

Expert Views

“The robust US jobs data for January indicates that the expected rate cuts from the Fed in the coming year may be less imminent. This is reflected in the recent sharp climb in US bond yields to above 4% levels, which prompted investors to book profit from the post interim Budget rally amid elevated valuations. However, the current drop in crude prices, provides support and restrains the decline,” said Vinod Nair, head of research at Geojit Financial Services.

Aditya Gaggar, Progressive Shares, said, “Back-to-back bearish candles have been formed, first Shooting Star candle and now Bearish Engulfing. This indicates a strong resistance at the higher levels. The zone of 21,640-21,700 will act as a strong support zone while the upside seems to be capped at 21,960. It is too premature to say that if the index violates the support zone then the ongoing correction may extend to 21,350 to form a Bullish Cypher pattern.”

Asian Markets

Asian shares eased on Monday and the dollar was firm after a robust US jobs report dashed expectations of a near-term interest rate cut from the Federal Reserve, while stocks in China were volatile as investor sentiment remained shaky.

The blue-chip CSI300 Index lost as much as 2.1% before ending up 0.7%, near levels last seen in 2019. The Shanghai Composite Index lost 1%, its sixth straight session of decline. Hong Kong’s Hang Seng Index was up 0.5%.

Oil Impact

Oil prices were steady on Monday following sharp falls last week, after Washington pledged to launch further strikes on Iran-backed groups in the Middle East and a strong US jobs report dampened hopes of swift rate cuts.

Brent crude futures fell 18 cents, or 0.2%, to $77.15 a barrel, while US West Texas Intermediate futures were at $72.04 a barrel, down 24 cents, or 0.3%.

Currency Watch

The Indian rupee closed lower on Monday weighed down by dollar demand from local oil companies and a jump in US Treasury yields. The rupee ended at 83.0550 against the US dollar, lower by 0.17% compared to its close of 82.9175 in the previous session.

The dollar index rose to 104.26 in Asia hours, its highest level in almost two months. Asian currencies fell as well, with the Thai baht, Korean won and Malaysian ringgit all down 0.7%.

(With inputs from agencies)

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