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Business News/ Markets / Stock Markets/  Sensex, Nifty 50 fall almost 1% each; why did the Indian stock market fall today?- explained

Sensex, Nifty 50 fall almost 1% each; why did the Indian stock market fall today?- explained

Stock market today: Sensex suffered a loss of 668 points, or 0.89 per cent, to end at 74,502.90, while the Nifty 50 settled at 22,704.70, down 183 points, or 0.80 per cent.

Stock market today: Sensex suffered a loss of 668 points, or 0.89 per cent, while the Nifty 50 fell 183 points, or 0.80 per cent, on Wednesday, May 29. (Pixabay)Premium
Stock market today: Sensex suffered a loss of 668 points, or 0.89 per cent, while the Nifty 50 fell 183 points, or 0.80 per cent, on Wednesday, May 29. (Pixabay)

Stock market today: Extending their losing streak into the fourth consecutive session, Indian stock market benchmarks—the Sensex and the Nifty 50—closed with significant losses of about a per cent each on Wednesday, May 29, amid weak global cues.

The stock market is reeling in the clutches of bears ahead of the Lok Sabha election outcome on June 4. While experts expect volatility to remain high due to election-related jitters, a lack of fresh cues, weak global signals, and concerns over geopolitical tensions keep market sentiment fragile.

The Nifty 50 opened 125 points lower at 22,762.75, compared to its previous close of 22,888.15, and remained in the negative territory throughout the session, hitting an intraday low of 22,685.45. The index finally closed 183 points, or 0.80 per cent, down at 22,704.70.

As many as 37 stocks ended in the red in the Nifty 50 index.

Shares of HDFC Life Insurance Company (down 2.90 per cent), SBI Life Insurance Company (down 2.53 per cent) and Tech Mahindra (down 2.27 per cent) closed as the top losers in the Nifty 50 index.

Also Read: Top Gainers and Losers today on 29 May, 2024: Hindalco Industries, Power Grid Corporation Of India, HDFC Life Insurance Company, SBI Life Insurance Company among most active stocks; Check full list here

On the other hand, shares of Hindalco (up 3.52 per cent), Divi's Labs (up 1.72 per cent) and Power Grid (up 1.29 per cent) closed as the top gainers in the Nifty 50 index.

The Sensex opened 344 points lower at 74,826.94 against its previous close of 75,170.45 and fell as much as 716 points in the intraday session to 74,454.55. The 30-share pack closed with a loss of 668 points, or 0.89 per cent, at 74,502.90 with 24 stocks in the red.

Mid and smallcap indices outperformed the benchmarks. The BSE Midcap index dropped 0.38 per cent, while the Smallcap index rose 0.23 per cent.

Also Read: Market Close Highlights: Sensex closes down 670pts, Nifty at 22,700; Bank, FS, Auto, IT drag, Pharma, Health, Cons. gain

The overall market capitalisation of BSE-listed firms dropped to nearly 415 lakh crore against nearly 417 lakh crore in the previous session. Thus, investors lost about 2 lakh crore in a single session.

Also Read: Lok Sabha Elections 2024 trading strategy: Largecaps or midcaps – what should you bet on?

Banking and financial stocks suffered significantly. The Nifty Bank index fell 1.30 per cent, while the Financial Services index declined 1.65 per cent.

Nifty Private Bank (down 1.36 per cent), Oil & Gas (down 1.01 per cent), IT (down 1 per cent), Realty (down 0.90 per cent), FMCG(down 0.54 per cent) and PSU Bank (down 0.49 per cent) also ended with losses.

Why did the Indian stock market fall today?

Experts observe that the market is witnessing profit booking at higher levels as it lacks fresh triggers and is uncertain about the election result on June 4. 

Experts pointed out the following five factors that could have contributed to the losses in the Sensex and the Nifty 50 on Wednesday. 

1. Election-related heebie-jeebies

Despite prevailing expectations that the BJP-led NDA will retain power after the election, market participants are keen to see whether the coalition will be able to secure as many seats as expected to continue its promised policy reforms confidently.

"The nervousness in the market continues with uncertainty regarding the election results," said Dr V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

2. Weak global cues

Weak global cues further weighed on domestic market sentiment as expectations of rate cuts have been weakening. US government bond yields reached a four-week high, putting pressure on stocks.

"Weak global cues prompted investors to take profits ahead of the US core PCE data, a key gauge of inflation anticipated to rise. The continued soaring of global inflation, like the latest trend in Japan and Australia, is diminishing investor expectations of a US Fed rate cut in the near term," said Vinod Nair, Head of Research, Geojit Financial Services.

3. Crude oil prices rise

Crude oil prices rose over a per cent today amid growing geopolitical tensions after Israel's attack on Rafah. Moreover, there are expectations that OPEC+ will maintain curbs on crude supply at its June 2 meeting.

Benchmark Brent Crude traded near the $85 per barrel mark.

4. Selloff in banking stocks

Poor show of banking heavyweight stocks, including ICICI Bank, HDFC Bank, Axis Bank and SBI, dragged the benchmarks. Banking stocks carry significant weight in the Sensex and the Nifty 50, so weakness in them drags the key indices down.

5. Technical factors

Hrishikesh Yedve, AVP of Technical and Derivatives Research at Asit C. Mehta Investment Intermediates, pointed out that the Nifty 50 confirmed a dark cloud cover candlestick pattern and witnessed profit booking.

"On the downside, the 21-DEMA is near 22,567 and the 34-DEMA is near 22,480. Thus, 22,567 and 22,480 will serve as support points for the index, while 22,800 and 23,110 will act as a major hurdle in the short term," said Yedve.

Read all market-related news here

Disclaimer: The views and recommendations above are those of individual analysts, experts, and brokerage firms, not Mint. We advise investors to consult certified experts before making any investment decisions.

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Published: 29 May 2024, 03:36 PM IST
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