Nifty falls 0.86% as oil, IT selling and foreign outflows weigh

Indian equities extended their decline for a third session as Brent crude moved above $100 a barrel amid escalating tensions in West Asia. Market participants and analysts linked the risk-off tone to the possible impact of higher energy costs on inflation, the rupee, corporate margins and the outlook for monetary easing.

Information technology stocks were the clearest index drag. Infosys, HCL Technologies, Tech Mahindra, Wipro and Tata Consultancy Services were among the major Nifty laggards, with reports attributing the selling to pressure on global markets, higher crude and concerns about interest rates. Coforge also remained weak after Chairman Om Prakash Bhatt resigned following concerns identified in an internal audit of the board evaluation process.

The relative strength in infrastructure, industrial and metal-linked shares provided only limited support. Adani Enterprises, Adani Ports, Coal India and Tata Steel were among the notable gainers in market reports. Coal India was also in focus ahead of reports that its subsidiary's production had improved as the monsoon receded, while the broader strength in industrial and infrastructure names was reinforced by fresh order-related disclosures.

The Reserve Bank of India was reported to have used short-term dollar-rupee sell-buy swaps to absorb excess rupee liquidity generated by foreign-currency deposit inflows. Bankers and market participants said the transactions covered near maturities, including September and possibly October, although the RBI did not officially confirm the size.

The operation matters for Indian markets because it withdraws rupees from the banking system temporarily. That can affect money-market conditions and the transmission of liquidity into credit and risk assets, even as the underlying foreign-currency inflows strengthen the external liquidity position.

SEBI proposed changes to governance at market infrastructure institutions, including a wider pool of eligible board candidates and standardised qualification, experience and certification requirements for chief technology, information security, compliance and risk officers. The proposals are aimed at strengthening governance and operational resilience at exchanges, clearing corporations and depositories.

Global risk appetite weakened as higher oil prices revived inflation concerns ahead of key US price data. The S&P 500 fell 0.5%, while futures for Japan, South Korea and Australia pointed lower in Asian trading. Reports also indicated weaker direction across several Asian markets and US equity futures before the Indian open.

The US 10-year Treasury yield rose to 4.84% after the US Treasury announced plans to buy back up to $6 billion of longer-dated debt, a scale that disappointed some investors who had expected a larger operation. Higher US yields can make emerging-market assets less attractive and increase pressure on Indian equity valuations and foreign flows.

Foreign portfolio investors were net sellers of Indian equities worth Rs 583 crore on September 9, while domestic institutional investors were net buyers of Rs 1,509 crore. Domestic buying cushioned the outflow but did not prevent the broader risk-off move. The rupee closed at 94.82 per US dollar as oil prices and demand for dollars added to currency pressure.

August consumer price inflation was not released during the session. A Reuters poll of 44 economists forecast CPI inflation at 4.80% year-on-year, up from 4.45% in July, with the official data due on September 14. The forecast would put inflation above the RBI's 4% medium-term target for a third consecutive month, but it is an expectation rather than an official result.

Gross GST collections for August had been reported at Rs 1,99,853 crore, up 14.8% year-on-year from Rs 1,74,116 crore. Cumulative gross GST collections for April-August were reported at Rs 10,42,757 crore, up 11% year-on-year. August trade data had not yet been released; the commerce ministry said it would publish the figures on September 15.

The corporate news flow was mixed. Coforge's board appointed Vivek Sharma as interim chairman after Bhatt's resignation. The company said the internal-audit concerns related to the board evaluation process and were unrelated to its financial statements, financial reporting or any financial issue. Its reported first-quarter FY27 revenue was Rs 5,528 crore, up 49.2% year-on-year, while net profit was Rs 532 crore, up 49.4% year-on-year but down 20.1% quarter-on-quarter.

Order and operating updates favoured infrastructure and renewable-energy names. Shakti Pumps received an order-related letter covering 10,000 solar water pumps in Maharashtra valued at Rs 235.92 crore, to be executed within 60 days of the work order. Enviro Infra Engineers disclosed a Rs 224.19 crore EPC letter of intent from Tata Power for a 180 MW wind project, while Dilip Buildcon received a Rs 1,800 crore letter of intent from the Petroleum and Natural Gas Regulatory Board for an LPG pipeline project.

IRB Infrastructure Developers reported August toll revenue of Rs 807.4 crore, up 25% year-on-year from Rs 646.2 crore. ICICI Prudential Asset Management received RBI approval to acquire up to 9.95% in four banks, including AU Small Finance Bank, CSB Bank, DCB Bank and Kotak Mahindra Bank. The approval is subject to applicable banking, foreign-exchange, securities and other regulations.

The primary-market pipeline remained an important liquidity consideration. Om Galaxy, Panchatv Bharat and Maharaja & Speedex India were scheduled to open on September 10. Kanohar Electricals and Prasol Chemicals were scheduled to close their offerings on the same day.

The market also tracked the flow of funds into recent issues. Reports said several IPOs were fully subscribed on their first day, while others remained undersubscribed, leaving institutional and retail demand uneven across the pipeline. This matters for secondary-market liquidity because funds committed to new issues can reduce near-term buying capacity in listed shares.