Stock market today: Sensex down over 400 points, Nifty 50 ends 0.64% lower; 5 key reasons behind market’s fall
- Stock market today: Domestic equity indices Sensex and Nifty 50 closed lower on Wednesday due to weak global cues. Nifty 50 hit a record high in the morning session, driven by a rally in metal stocks.
Stock market today: Domestic equity benchmark indices, the Sensex and the Nifty 50, ended Wednesday's trading session in red amid weak global cues, and as Asian markets witnessed mixed trends.
On Wednesday's morning session, the Nifty 50 touched a record high for the third consecutive session amid a broad rally in metal stocks. Metals rose 1.9%, led by a 3% rise in aluminum producer Hindalco after its US subsidiary Novelis filed for a US IPO.
The 30-share BSE Sensex ended lower by 434.31 points or 0.59% at 72,623.09 level while the Nifty 50 closed at 22,055.05 level, down 141.90 points or 0.64%. On the broader market front,the Nifty Small Cap 100 dropped 1.04% and the Nifty Midcap 100 indexes was down by 1.25%.
Market analysts believe the benchmarks took a break after setting new records. But there was one bright spot: Nifty 50 managed to hold onto the critical 22,000 level. An other positive fact was that Bank Nifty (-0.16%) had a slight decline, outperforming Nifty 50.
Let's look at some of the key reasons behind today's market fall.
Profit Booking
A rush for profit-taking backed by mixed global cues drove down the market, according to analysts.
“The Indian market is facing stiff resistance at higher levels; the valuation of a broader index is at a significant premium, leading to an unfavourable risk reward, which influences investors to book profits,” said Vinod Nair, Head of Research, Geojit Financial Services.
FOMC minutes
With the Federal Open Market Committee (FOMC) minutes set to be released tomorrow, all eyes will be on them for more remarks from Fed officials on when the Fed will begin reducing interest rates.
"Global markets traded cautiously awaiting the US Fed minutes. Concerns lingered since investors were heavily betting on a US Fed rate cut, which is put at risk by January's higher-than-expected inflation," explained Vinod Nair.
FIIs selling
This week, the market saw foreign institutional investors (FIIs) continue to be net sellers while domestic funds were buyers. According to exchange data, FIIs sold shares worth ₹1,335.51 crore on Tuesday.
Nvidia earnings
Globally, investors become more cautious ahead of Nvidia's reports, which causes US markets to drop on Friday. The US bull market has been led by Nvidia. Reports state that there is a chance that Nvidia will come in below expectations and deliver lower-than-expected results. Nvidia's results earlier led to a sharp increase in AI and other semi-conductor stocks a day later. Therefore, investors are a little worried.
Israeli airstrike
Markets plunge after an Israeli bombing, giving investors an excuse to book profits before tensions in the global arena increase, believes analysts.
“Technically on nifty 22,000 acts as a major support if closing below this we can see more selling on the index. Undertone remains strong but such headlines would bring in volatility and see profit booking attempts," said Prashanth Tapse, Research Analyst, Senior Vice President of Research at Mehta Equities.
Top Nifty 50 gainers and losers today
As many as 11 stocks settled in the green in the Nifty 50 index while the rest 37 ended in red.
Shares of Tata Steel Ltd (up 2.09%), State Bank of India (up 1.57%), IndusInd Bank (up 0.72%), JSW Steel Ltd (0.61%), and Sun Pharmaceutical Industries Ltd (up 0.41%).
On the other side, Bharat Petroleum Corporation Ltd (down 3.73%), NTPC Ltd (down 2.83%), Coal India Ltd (down 2.80%), Power Grid Corporation of India Ltd (down 2.78%), and Wipro Ltd (down 2.06%) were among the laggards.
Sectoral indices today
Amongst sectoral indices, Nifty Bank (down 0.16%), Nifty Financial Services (down 0.55%), Nifty Auto (down 0.50%), Nifty IT (down 1.64), Nifty Pharma (down 0.40%), Nifty Oil & Gas (down 1.44%)and Nifty Media (down 4.91%) closed in red. On the other side, Nifty Realty (up 2%), and Nifty PSU (up 0.60%) ended in green.
Technical Views
"The Nifty has formed a bearish engulfing pattern on the daily chart, indicating a potential pause in the ongoing rally. The momentum indicator RSI is showing a bearish crossover, signaling weakness in the near term. Immediate support is positioned at 22,000; a decisive drop below this level could lead the index towards 21,700. On the upside, resistance is identified at 22,160," 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 decision.
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