Following a notable decline in the preceding session, Indian stocks are experiencing continued losses today (Thursday), primarily influenced by a significant decline in banking shares once again.
The Nifty 50 witnessed a morning trade dip of 286 points, pushing the index to trade below the 21,300 level for the first time in CY24. The S&P BSE Sensex plummeted by another 834 points in today's early morning trade, falling below the 71,000 level, and reaching to 70,665 points.
However, the indices recovered slightly with the Nifty trading at 21,482 points and the Sensex trading at 71,226 at 11:50 AM.
Both benchmark indices recorded their worst intraday performance in 16 months during Wednesday's session, with the Nifty 50 slumping by 460 points and the Sensex tumbling by 1,628 points.
The downward pressure on banking stocks continues, with major heavyweights witnessing a notable cut in their share prices. HDFC Bank shares dropped by another 3.7% to ₹1,480 apiece in today's early trade, while those of Kotak Mahindra Bank, IndusInd Bank and Au Small Finance Bank experienced fall between 0.2% and 0.5%.
Other heavyweight stocks facing challenges in today's trade include LTIMindtree, Asian Paints, NPTC, and ITC, which are currently trading with declines ranging between 2% and 3.5%.
Commenting on the market performance, Dr V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said," At elevated valuations, the market needs only a trigger for a sell-off, and yesterday this trigger came in the form of HDFC Bank’s worse-than-expected results. It is also important to understand that there was a sell-off in other emerging markets like Taiwan and Korea, indicating that this is an emerging market correction driven by FPI outflows."
"The FPI sell figures in India yesterday were huge at ₹10,578 crore. In the context of rising bond yields in the US, FPIs may sell again. But this is likely to be countered by DII buying in fairly valued large caps with growth potential."
"Investors may wait and watch for this turbulence to subside. The resilience of IT stocks in this crash is an indication of the strength of the sector. Apart from IT, large caps like RIL, ICICI Bank, L&T, and Bharti have the strength to tide over this turbulence. Further dips in HDFC Bank will provide buying opportunities for long-term investors," he added.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.
