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Business News/ Markets / Stock Markets/  Nifty 50 tumbles 1.34%, largest intraday drop since March 2023 – key reasons
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Nifty 50 tumbles 1.34%, largest intraday drop since March 2023 – key reasons

In 2023, the Nifty 50 has suffered a decline of over 1% on more than 11 occasions, with January 2023 having the most instances of such fall.

The Yield on the 10-year US treasury note hit 5% during Monday's trade, which is the highest level since 2007. (REUTERS)Premium
The Yield on the 10-year US treasury note hit 5% during Monday's trade, which is the highest level since 2007. (REUTERS)

The Indian stocks experienced a dramatic downturn in Monday's trade, marking one of the bleakest intraday performances of the year. The Nifty 50 index plunged by 1.34% to reach a seven-week low at 19,281, registering the largest intraday drop since March 2023.

Out of the 50 stocks within the index, 48 concluded the session in the red, with LTI Mindtree being the biggest loser, experiencing a nearly 4% decline. It was followed by Adani Enterprises, Hindalco Industries, Adani Ports & SEZ, UPL, JSW Steel, Tata Steel, TCS, Tata Motors, IndusInd Bank, HDFC Life Insurance Company, Grasim Industries, Wipro, and Coal India, all recording losses ranging from 2% to 3.6%.

In 2023, the Nifty 50 has suffered a decline of over 1% on more than 11 occasions, with January 2023 having the most instances of such fall.

Month Fall (%)
January 27, 20231.61%
February 22, 20231.53%
March 13, 20231.49%
October 23, 2023 (Today)1.34%
January 25, 20231.25%
July 21, 20231.17%
September 20, 20231.15%
August 02, 20231.05%
January 04, 20231.04%
January 10, 20231.03%
May 05, 20231.02%
Source: Tradingview 

According to analysts, the sharp drop in today's trade was attributed to several factors exerting downward pressure on investor sentiment. One key driver of this market turmoil was the escalating yields of US government bonds, which sparked concerns among investors.

Vinod Nair, Head of Research at Geojit Financial Services, said, "Despite the healthy performance of private banks and marginal reductions in oil prices, investor confidence remained pessimistic, and a widespread consolidation persisted in the domestic markets. The global markets echoed the same trend, as the unrest in West Asia has the potential to spiral further. Increased apprehensions surrounding prolonged elevated interest rates fueled a continued upward movement in the US 10-year yield.

"Amid worries over moderation in growth on account of elevated interest rates and higher energy prices, heightened risk aversion was witnessed in the Indian mid- & small-cap space, banks, metals, and energy stocks. While a period of consolidation in the short term seems certain, the extent of this phase will be shaped by global factors," he added. 

Why Indian stock market is falling today — explained with 5 reasons

On the technical front, Rupak De, senior technical analyst at LKP Securities, said," The bears have maintained a strong grip on the index, resulting in significant selling pressure. This pressure led to a breakdown of the key support level at 19500. With support at 19500 breached, the next significant support level was at 19200. If the index fails to sustain above this level, it may experience further declines towards the 19000–18000 range.

"The overall sentiment for the index remains bearish. As long as the index stays below the 19600 mark, the view remains bearish, and any upward movements are viewed as selling opportunities," he stated. 

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 taking any investment decisions.

 

 

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Published: 23 Oct 2023, 06:57 PM IST
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