Stock market today: Nifty 50, Sensex fall 1.5% each; mid, smallcaps bleed; investors lose over ₹8 lakh crore in a day

Stock market today: Domestic market benchmarks the Nifty 50 and the Sensex suffered strong losses on an across-the-board selloff on Tuesday, January 23, amid weak global cues. The sell-off was not only broad-based but also more pronounced in the midcap and smallcap space, reflecting deeper losses in the respective indices.

Recent market sentiment has been fragile, largely influenced by underwhelming December quarter earnings. With waning optimism regarding potential rate cuts in the US, investors are booking profits amidst growing geopolitical tensions and heightened economic uncertainty in major global economies, including the US, China and Europe.

"Selling by FIIs due to reasons like high valuation and mixed results for the earnings season so far, along with recent escalations in tensions in West Asia and the Red Sea, prompted the investors to book profit from the recent rally. Going forward, markets are likely to witness stock-specific actions during the ongoing earnings season," said Vinod Nair, Head of Research, Geojit Financial Services.

After opening about 145 points higher at 21,716.70, the Nifty rose 178 points in intraday trade to hit the day's high of 21,750.25. However, the index failed to hold altitude and plunged as much as 379 points in intraday trade to hit the day's low of 21,192.60. The index finally closed with a deep cut of 333 points, or 1.54 per cent, at 21,238.80.

The Sensex opened 445 points higher at 71,868.20 and jumped as much as 616 points to the intraday high of 72,039.20. The index later erased all gains and sank 1,189 points to hit the intraday low of 70,234.55. The index closed 1,053 points, or 1.47 per cent, down at 70,370.55.

Also Read: Stock market today: Sensex tanks 1,800 points from day’s high, Nifty 50 falls 1.5%: 5 key reasons behind market crash

Shares of heavyweights HDFC Bank, Reliance Industries, SBI and Larsen & Toubro ended as the top drags on the benchmark indices.

HDFC Bank share price has been weak after its Q3 result on January 16. The stock rose about half a per cent in the previous session but resumed its downward march today, falling 3.45 per cent. For the current month, the stock is down over 16 per cent. 

Zee Entertainment lost a whopping 32.73 per cent today after the Sony merger deal termination.

Also Read: Zee share price tanks 33%, erases over ₹7k crore mcap as Sony calls off merger; brokerages downgrade stock

The losses in midcaps and smallcaps were even deeper as the BSE Midcap and Smallcap indices ended with losses of nearly 3 per cent each.

The overall market capitalisation of the BSE-listed firms plunged to nearly ₹366 lakh crore from nearly ₹374.4 lakh crore in the previous session, making investors lose about ₹8.4 lakh crore in a single session.

After today's close, the Sensex is down 3 per cent while the Nifty 50 has declined over 2 per cent in January so far. However, the midcap and smallcap indices are still in the green for the current month. BSE Midcap index is up over 1 per cent while the Smallcap index is up about 2 per cent in January so far.

Top Nifty 50 gainers today

Only 10 stocks managed to end in the green in the Nifty 50 index on Tuesday among which shares of Cipla (up 6.97 per cent), Sun Pharma (up 4.04 per cent) and Bharti Airtel (up 2.97 per cent) ended as the top gainers.

Top Nifty 50 laggards today

Shares of IndusInd Bank (down 6.18 per cent), Coal India (down 5.58 per cent) and SBI Life Insurance Company (down 4.66 per cent) ended as the top laggards in the Nifty 50 index.

Also Read: Top Gainers and Losers today on 23 January, 2024: Cipla, Sun Pharmaceutical Industries, Indusind Bank, Coal India among most active stocks; Check full list here

Sectoral indices today

Barring Nifty Healthcare (up 1.81 per cent) and Pharma (up 1.66 per cent), all sectoral indices ended with significant losses.

Nifty Media plunged 12.87 to end as the top loser among sectoral indices, followed by Nifty Realty (down 5.31 per cent), PSU Bank (down 4.10 per cent), Oil & Gas (down 3.47 per cent) and Metal (down 3.43 per cent).

Nifty Bank lost 2.26 per cent.

Expert's views on markets

“Despite positive momentum in the global market, selling pressure continued today in the domestic markets mainly on the back of news that is worrying FIIs, as SEBI has drafted a paper to impose tightened ultimate beneficial ownership norms for overseas investors with effect from February 1," said Prashanth Tapse, Senior VP (Research), Mehta Equities.

"This was despite pressure from foreign banks and few offshore fund managers to ease the rules ahead of the deadline. If this stands true domestic markets may see more selling in the range of ₹1.5 lakh crore to ₹2 lakh crore over the next six months by funds unable to comply with the norms," said Tapse.

He added that the recent selloffs in Indian markets have been triggered by heavy offloading by FIIs in the past few sessions and today's slump could be due to mixed earnings outcomes so far and higher valuation worries. There are indications that rate cuts in the US may not happen soon because of inflation playing truant there, and hence investors are getting uncomfortable with the current valuations.

"Although India's growth prospects for the year appear positive, a slowdown in China and other developing countries may lead to demand slowdown and push investors to curb their equity exposure going ahead,” said Tapse.

Technical views on Nifty 50

"A few days of consolidation have led to a decline, with Nifty slipping below the lower end of the recent consolidation range. The bearish sentiment appears to be strengthening as Nifty closed at its lowest points on multiple days. Weakness may persist in the short term, with support at 21,200; below this level, the index could potentially decline towards 21,000 and beyond. Looking ahead, the market may continue to be a "sell on rise" scenario as long as it remains below 21,500," said Rupak De, Senior Technical Analyst, LKP Securities.

Read all market-related news here

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.