Nifty 50, Sensex crash today over 1% each; 5 reasons why market is falling today
- Nifty 50, Sensex crash today due to lack of direction, heavy selling in PSU bank, realty, auto, oil, and gas stocks.
Sensex crash today: Domestic benchmark equity indices, the Sensex and the Nifty 50, ended Wednesday's session lower on the backdrop of a lack of direction and led by heaving selling in PSU bank, realty, auto, oil, and gas stocks.
The 30-share BSE Sensex ended lower by 790.34 points or 1.08% at 72,304.88 level while the Nifty 50 closed at 21,951.15 level, down 247.20 points or 1.11%.
On the broader market front, the Nifty Small Cap 100 dropped 1.87% and the Nifty Midcap 100 indexes was down by 1.94%.
Analysts believe that investors booking profits after significant gains could have triggered some short-term selling pressure. Additionally, as the F&O expiry day on Thursday, February 29th, draws near, traders' rollover of holdings to the next expiry day has caused volatility.
Further, analysts noted that 90 stocks were trading lower during Wednesday's session as the Nifty Midcap index fell more than 1,000 points.
Let's look at some of the key reasons behind today's market fall.
Foreign Institutional Investors (FIIs) selling
FIIs selling off substantial amounts of Indian stocks possibly contributed to the market's fall, according to experts.
FII has continued to be a net seller, with month-to-date (MTD) net sales of ₹17,650 crore. The head of business development for institutional equity at Emkay Global, Jaykrishna Gandhi, stated that domestic institutional investors (DIIs) had, on the other hand, net purchased ₹23,782 crore MTD.
Key Economic data ahead
Ahead of important US economic data, including the second estimate of GDP, PCE, and manufacturing statistics, analysts say that global markets have been struggling for direction over the week.
“The market also became nervous before so many economic indicators such as GDP data, PCE price index data, and manufacturing PMI numbers in the US. Another reason may be that the US government will partially shut down on March 1st without a spending bill,” said Pravesh Gour, Senior Technical Analyst at Swastika Investmart Ltd.
Delay in US Fed rate cut
The US Fed has stated that, given the upside risk to inflation, there is not an urgency to cut rates quickly. There is concern among global investors that the Fed's rate cut may be postponed as they await important US economic statistics, such as personal consumption expenditure, in the hopes of a positive projection.
China's property crisis
The domestic benchmark indices traded choppy, mirroring global market. The Asian market trend was further influenced by turmoil in China's real estate sector.
According to a news report from PTI, Country Garden, the biggest private property developer in China, said on Wednesday that it is facing a liquidation petition due to its inability to repay a 1.6 billion Hong Kong dollar (USD 204.5 million) term credit facility. May 17 is set aside for the case's initial hearing.
Hong Kong's Hang Seng fell 1.51% to 16,536.85 and the Shanghai Composite down 1.91% at 2,957.85. Tokyo's Nikkei 225 ended flat at 39,208.03. South Korea's Kospi rose 1.04% to 2,652.29.
Profit booking
“Profit booking weighed on Indian markets, fuelled by concerns about India's Q3 GDP growth potentially slowing to 6.6% from 7.6% in Q2. Rate-sensitive sectors faced pressure, contributing to broader market underperformance,” said Vinod Nair, Head of Research, Geojit Financial Services.
Top Nifty 50 gainers and losers today
As many as 4 stocks settled in the green in the Nifty 50 index while the rest 46 ended in red.
Shares of Hindustan Unilever Ltd (up 0.77%), Bharti Airtel Ltd (up 0.16%), Infosys Ltd (up 0.14%), and Tata Consultancy Services Ltd (up 0.13%).
On the other side, Power Grid Corporation of India Ltd (down 4.22%), Bajaj Auto Ltd (down 3.82%), Apollo Hospitals Enterprise Ltd (down 3.77%), Eicher Motors Ltd (down 3.57%), and IndusInd Bank Ltd (down 3.15%).
Sectoral indices today
Notably, the Nifty Media (-3.5%), Nifty PSE, Nifty Reality, PSU Banks, Auto, Metal, and Nifty PSE indexes all saw significant losses, falling 2% apiece, and they all ended weakly.
Expert's views on markets
The market on Wednesday was dominated by the bears, according to Prashanth Tapse, Research Analyst and Senior Vice President of Research at Mehta Equities, where the Nifty 50 fell dramatically and finished below the critical 22,000 level.
“Massive profit booking to be blamed. It was sea of red at Dalal Street as all sectoral indices had nothing to offer but blood, toil, tears and sweat,” said Tapse.
Tapse further noted that the primary cause of the pessimism is the lack of direction before Thursday's announcement of the US Personal Consumption and Expenditures (PCE) index for January, which is the Fed's favoured inflation indicator that tracks consumer spending.
At the same time, Vodafone Idea's shares fell 13.88% as investors' sentiment was not improved by the company's announcement of its fundraising effort.
Technical Views
"Nifty 50 underwent a sharp correction during the day amid a strong sell-off. The index dropped below the 22,000 mark, indicating a growing weakness. Nevertheless, it managed to close just above the 21EMA on the daily timeframe. Observing the daily chart, the index has been navigating within a rising channel. A decline below 21,950 could potentially trigger a correction towards 21,800 in the near term. Conversely, a sustained trade above 21,950 might spur a recovery in the index towards 22,100," said Rupak De, Senior Technical Analyst, LKP Securities.
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.
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