Infosys Leads IT Slide as Sensex, Nifty Drop on $91 Crude

Indian equities opened lower Tuesday as Brent crude held above $91 a barrel, the highest level since October, and the 10-year U.S. Treasury yield pushed to 4.73%.

The BSE Sensex fell 278 points to 77,450 in early trade. The NSE Nifty slipped 58 points to 24,230.

"Two developments during the last several hours are likely to impact the market today, at least in the early hours of trading," V K Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd, said. He pointed to the crude spike, driven by escalating Iran-U.S. tensions, and the rise in bond yields, which he called "negative for FII inflows" that had turned positive in July and August.

Foreign institutional investors sold Rs 2,535 crore worth of equities Monday, exchange data showed. The selloff followed a negative session on Wall Street, where the S&P 500 and Nasdaq both closed lower Monday.

From the Sensex pack, Bharti Airtel, Asian Paints, InterGlobe Aviation, Infosys, HCL Tech and Tech Mahindra were among the biggest decliners. Reliance Industries, Sun Pharma, Maruti and Axis Bank posted gains.

Brent crude traded 0.63% higher at $91.46 a barrel.

"Elevated crude, with Brent near $91 on unresolved Iran tensions, kept sentiment guarded. Wall Street mirrored the caution," Rajesh Palviya, Head of Research at Axis Direct, said.

Asian markets followed the downbeat tone. South Korea's Kospi, Japan's Nikkei 225, Shanghai's SSE Composite and Hong Kong's Hang Seng all traded lower.

Vijayakumar added a note of optimism: "The tailwind for the market is the resilient Indian economy and clear indications of a turnaround in earnings growth."

Infosys, which has an Alpha Score of 57, slipped alongside other IT names as the yield rise hit high-valuation tech stocks hardest. The sector is particularly sensitive to FII flows, which tend to rotate out of Indian IT when U.S. bond yields offer a competing risk-free return.