Indian equity benchmarks opened lower on Thursday as weak Asian markets, rising crude oil prices and elevated US bond yields dampened investor sentiment.
The BSE Sensex fell 366.36 points, or 0.50 per cent, to open at 73,343.33, while the NSE Nifty declined 123.60 points, or 0.54 per cent, to 22,687.75.
Most sectoral indices traded in the red during early deals, with auto, metal and healthcare stocks leading the losses.
Nifty Auto, Nifty Metal and Nifty Healthcare fell by up to 0.98 per cent, while Nifty Pharma dropped 0.78 per cent. FMCG, realty, cement and financial stocks faced selling pressure.
Market analysts said concerns over stretched valuations in mid- and small-cap stocks were strengthening the trend of large-cap shares outperforming their smaller peers. They noted that liquidity, rather than earnings growth, had supported broader-market resilience in recent months, leaving several mid- and small-cap stocks overvalued compared with large-cap shares.
Rising crude prices and elevated US Treasury yields added to external pressures, encouraging traders to build short positions despite continued institutional buying.
Analysts suggested that investors consider fairly valued large-cap stocks as markets undergo a potential correction.
Analysts warned of further Nifty losses, citing 22,590 support and 22,840 resistance.
FIIs and DIIs bought ₹1,022 crore and ₹1,614 crore, respectively, on Wednesday.
Asian markets fell up to 2 per cent, while Wall Street gained. Brent crude rose above $110 per barrel.
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