Nifty slips as oil, foreign selling weigh on Indian equities

Indian equities ended lower for a second session on Tuesday, with monthly derivatives expiry adding to intraday volatility. Market reports linked the weakness to uncertainty over US-Iran talks, elevated crude prices, high US Treasury yields and sustained foreign selling. The indices recovered from their session lows, but the broader market also weakened.

Titan, Eternal, HCL Technologies, HDFC Life and Infosys were among the Nifty’s reported laggards. Dr Reddy’s Laboratories, NTPC, Tata Steel, Adani Enterprises and Adani Ports were among the gainers. Reports did not identify a common company-specific catalyst for these moves; they placed them against a risk-averse session. Voltas and Blue Star also gave up earlier gains, with reports citing expectations of price hikes.

Foreign portfolio investors sold Rs 9,980 crore of Indian equities on 29 September, according to exchange data, while domestic institutional investors bought Rs 6,953 crore. The opposing flows provided some support but did not offset foreign selling. Traders also reported that the rupee briefly crossed 96 to the dollar; market participants attributed its recovery to likely Reserve Bank intervention, though that intervention was not confirmed by the central bank.

The relative strength in infrastructure and industrial names was selective: NTPC, Tata Steel, Adani Enterprises and Adani Ports appeared among the session’s gainers. No single catalyst was reported across those stocks. IT and financial shares faced the same broader pressures from risk aversion and foreign outflows; market reports did not establish a common company-specific trigger for the sector moves.

The main recent domestic activity signal was August industrial production, released on 28 September. IIP grew 8% year-on-year, against a revised 7.4% in July and a 7% consensus estimate, according to the reported data. Manufacturing grew 9% and electricity and gas supply rose 12.3%, while mining contracted 5.6%. The stronger headline offers evidence of resilient factory activity, but the mining contraction and higher oil costs remain relevant risks for the growth and inflation outlook.

No new CPI, GST, trade or PMI release for the morning of 30 September was identified in the available reports. Traders said the RBI likely intervened in the currency market after the rupee weakened, but the central bank did not publicly confirm that action in the reports reviewed. The RBI’s next policy meeting was reported as scheduled for 5–7 October.

Asian shares were higher in early trade, with technology stocks leading, after oil eased in the previous session on reports of recovering Saudi crude exports. US shares ended slightly lower on Tuesday as Treasury yields rose ahead of inflation and labour-market data. The US 10-year yield was near its highest level since 2007 in Asian trading.

The oil pullback offers some relief to an import-dependent economy such as India, but Brent remained above $100 a barrel in early Asian trade. Persistently high global yields can also weigh on emerging-market flows and raise the relative appeal of dollar assets. For Indian equities, the combination keeps the rupee, domestic bond yields and foreign-investor activity in focus.

Order announcements are likely to make infrastructure and power names more stock-specific at the open. KPI Green Energy said it received a Rs 2,025 crore order for a turnkey solar project. Power Mech Projects disclosed a Rs 549 crore operation and maintenance contract for a thermal power plant, while KSB reported a $12.40 million export order for boiler feed pump packages.

Tata Steel reported that a tax tribunal ruling reduced its tax exposure in a matter by about Rs 427 crore, to Rs 1,259 crore. It also disclosed a $340 million investment in its overseas subsidiary as part of an additional funding plan. These are reported corporate developments; no consensus estimate or earnings comparison was provided for them.

Early indications pointed to a mildly positive start for Indian shares, but the overnight rise in global yields and continued foreign selling leave the tone vulnerable to changes in oil and currency trading. Investors will also be assessing the new order announcements and the day’s IPO activity.