Sensex crashes almost 500 points, Nifty 50 extends losses for 6th consecutive session

Unresolved West Asia crisis and concerns over the impact of elevated oil prices on domestic macro and corporate earnings continue weighing on Indian stock market sentiment.

Benchmark Sensex crashed 493 points, or 0.63%, to end at 77,235.46 on Tuesday, 18 August, while the NSE barometer Nifty 50 extended losses for the sixth consecutive session, ending with a loss of 133 points, or 0.55%, at 24,154.90.

The Nifty Midcap 100 index also lost 0.43%, while the Nifty Smallcap 100 ended flat.

Over the last sessions, the Nifty has lost 1.7%. Sensex, on the other hand, ended lower for the third consecutive session, overall shedding 1%.

The advance-decline ratio tilted in favour of decliners, as of the 4,500 stocks traded on the BSE, nearly 2,400 ended lower while some 1,900 rose.

What drives the market down?

The biggest worry for the domestic market is elevated crude oil prices, which have fanned fears that India's fiscal condition could be strained, inflation could spike, the rupee could weaken further, and foreign capital could flow out aggressively.

Oil price benchmark Brent crude traded near $91 per barrel when the Sensex closed, as the US-Iran conflict remains unresolved. Iran has rejected US President Donald Trump’s claim that he could declare the Strait of Hormuz a US territory. As per media reports, Iran has warned of a ‘timely and precise’ attack if US diplomacy fails.

Track US-Iran war news live updates here

"Crude oil remained the primary drag on market sentiment, while rising U.S. bond yields and weak global cues prolonged the risk-off trend in Indian equities. Investor anxiety increased as hopes for a Middle East resolution faded following the expiration of the temporary U.S.-Iran ceasefire, heightening concerns about renewed inflation," Vinod Nair, Head of Research, Geojit Investments, noted.

"Elevated U.S. yields further reduced the attractiveness of emerging markets, and IT stocks led losses amid fears that persistently high interest rates could dampen global technology spending. Although domestic fundamentals continue to be supportive, sustained high crude prices and rising input costs could pressure recent earnings upgrades, prompting investors to remain cautious in the near term," said Nair.

Top Nifty gainers and losers today

As many as 40 stocks ended in the red in the Nifty 50 index, with Tata Motors Passenger Vehicles, Asian Paints, Infosys, Wipro, and HCL Technologies among the top laggards, each dropping over 2%.

On the other hand, Axis Bank, Max Healthcare Institute, Mahindra and Mahindra, Grasim Industries, and Power Grid Corporation of India ended as the top gainers in the index, rising up to 1%.

Sectoral indices today

Nifty IT lost 1.93%, ending as the top loser among sectoral indices. It was followed by Nifty Realty (down 1.42%) and PSU Bank (down 1%). Bank Nifty dropped 0.41%.

Most traded stocks today

Vodafone Idea, Motisons Jewellers, Milky Mist Dairy Food, Cupid, PC Jeweller, and Suzlon Energy were the most traded stocks in terms of volume on the NSE.

180 stocks hit 52-week high; 91 plumb 52-week lows

Despite stock market weakness, as many as 180 stocks, including Bosch, GlaxoSmithKline Pharmaceuticals, Lenskart Solutions, and Solar Industries India, hit their 52-week highs in intraday trade on the BSE.

On the flip side, some 91 stocks, including ITC, IRFC, KEC International, and Procter and Gamble Hygiene and Health Care, hit their 52-week lows in intraday trade on the BSE.

Nifty 50 technical outlook

According to Sudeep Shah, the head of technical and derivatives research at SBI Securities, the 24,030-24,000 zone is expected to act as a key support area for the Nifty, as the rising trendline of the upward-sloping channel is positioned around these levels.

"A decisive breakdown below the 24,000 mark could accelerate selling pressure and trigger a deeper correction towards the 23,850 level. On the upside, the 24,280-24,300 zone remains a crucial resistance area for the index. As long as the Nifty continues to trade below 24,300, the overall market bias is likely to remain bearish," said Shah.

Ajit Mishra, SVP- Research at Religare Broking, pointed out that the Nifty has slipped below the crucial 24,200 support zone, further weakening the near-term structure after six consecutive sessions of decline.

"The current setup indicates the possibility of further correction towards 24,000, followed by 23,800. On the upside, 24,250 is likely to act as the immediate hurdle, followed by the 24,350–24,400 zone," said Mishra.

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Disclaimer: This article is for educational purposes only and does not constitute investment advice. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.