Sensex, Nifty start FY24 on volatile note; BPCL drops 4%, Maruti up 3%

The domestic equity market opened higher in the first session of the new financial year, only to turn negative as rising inflation concerns due to a surge in oil prices after OPEC+’s surprise output cut weighed on investor sentiment.

The Nifty50 index fell 9 points or 0.05% to 17,350, while the S&P BSE Sensex dropped 53 points or 0.09% to 58,938, as of 9.33 am.

From the Sensex pack, Maruti, UltraTech, and Bajaj Finserv were the top gainers, rising over 1-2%. Bharti Airtel, Bajaj Finance, Titan, HCL Tech and M&M also opened with gains. Meanwhile, Asian Paints, Tech Mahindra, HUL, Nestle and HDFC opened with cuts.

Shares of Eicher Motors gained 3% in early trade after Royal Enfield saw a 7% YoY rise in total sales in March. PSU firm Rail Vikas Nigam, surged over 3% after it bagged several orders, including a Rs 12.72 billion project.

On the sectoral front, Nifty Auto surged 0.96% and Nifty Realty rose 0.80%. Whereas, Banks, FMCG and IT opened lower. In the broader market, Nifty Smallcap50 advanced 0.76% and Nifty Midcap50 gained 0.45%.

Experts View

“There are more headwinds for markets at this stage. The strongest headwind is the sharp 5% spike in Brent crude caused by the unexpected output cut by OPEC +. This will make inflation management tough for the RBI and therefore a 25 bp rate hike by the MPC on April 6th is a given now,” V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services said.

“Auto sales data in March reflect improvement in domestic demand. Maruti’s numbers are very impressive. Survey among industry leaders indicates rising capex plans and hiring. This augurs well for capital goods,” Vijayakumar said.

Deepak Jasani, Head of Retail Research at HDFC Securities, said, “17,451-17,529 could be the resistance for Nifty in the near term while 17,225 could be a support. As we enter a new fiscal year, we may see some more gains before pre Q4 results nervousness kicks in.”

Global Markets

US stocks closed sharply higher Friday, following a softer-than-expected inflation report for February. The Nasdaq Composite ended March with its largest quarterly gain since 2020.

For the week, the Dow gained 3.2% while the S&P rose 3.5% and the Nasdaq Composite advanced 3.4%. The Dow and S&P 500 each booked its best week since November, according to Dow Jones Market Data.

Asia-Pacific markets largely rose on Monday as investors further digested key manufacturing data in the region. Japan’s Nikkei 225 surged 0.60%, and China’s Shanghai Composite rose 0.56%, while South Korea’s Kospi declined 0.16%.

Crude price rises

Oil prices surged on Monday after Saudi Arabia and other OPEC+ producers announced a surprise round of output cuts, a potentially ominous sign for global inflation just days after a slowdown in US price data had boosted market optimism.

Brent oil futures jumped $4.30 to $84.19 a barrel on news output would be cut by around 1.16 million barrels per day, while US crude climbed $4.17 to $79.84. The change comes before a virtual meeting of an OPEC+ ministerial panel, which includes Saudi Arabia and Russia.

Rupee Weakens

The Indian rupee fell 25 paise to $82.46 against the US dollar in early trade. The dollar index, which tracks the movement of the greenback against a basket of six major world currencies, rising 0.52% to 103.03 level.