Market takes a breather: Sensex and Nifty decline on global uncertainty 

The stock market experienced a significant downturn on Thursday, with benchmark indices Sensex and Nifty falling sharply amid global economic concerns and uncertainty about future interest rate cuts.

The Sensex plummeted 1,190.34 points or 1.48 per cent to close at 79,043.74, while the Nifty 50 ended 360.75 points or 1.49 per cent lower at 23,914.15.

The market’s decline was primarily attributed to the overnight sell-off in the US market, driven by renewed uncertainty about the Federal Reserve’s rate cut trajectory and rising geopolitical tensions.

Vinod Nair, Head of Research at Geojit Financial Services, noted, “Domestic markets took a breather after a strong start to the week… the correction impacted heavyweight IT and consumer discretionary stocks.”

Sector-specific performance revealed widespread losses, with most indices closing in the red.

The IT sector was particularly hard-hit, experiencing significant selling pressure. Ameya Ranadive, Senior Technical Analyst at StoxBox, highlighted that “all indices, except for Nifty Media and Realty, were in the red, primarily due to a sell-off in IT and automobile stocks amid global economic concerns.”

Among individual stocks, several notable companies experienced notable price movements. Top gainers included Adani Enterprises with a 1.63 per cent increase, SBI at 0.77 per cent, Shriram Finance at 0.63 per cent, and Cipla at 0.47 per cent.

Conversely, top losers were led by SBI Life Insurance, which dropped 5.41 per cent following reports that the insurance regulator may consider capping the parent bank’s share in bancassurance business. Other significant losers included HDFC Life (-3.74 per cent), Mahindra & Mahindra (-3.35 per cent), Infosys (-3.34 per cent), and Adani (-2.53 per cent).

Market breadth showed mixed signals, with 2,207 advances against 1,733 declines out of 4,049 stocks traded. The market saw 203 stocks touching 52-week highs and 23 hitting 52-week lows. Additionally, 357 stocks were in the upper circuit, while 217 were in the lower circuit.

Ajit Mishra, SVP of Research at Religare Broking, provided insight into the market’s technical aspects: “Nifty struggled to breach the key resistance at 24,350 and slipped below its 20 DEMA, filling the gap on the daily chart. This suggests a likely consolidation phase ahead.”

The market’s volatility was reflected in the India VIX index, which witnessed a minor rally to 15.20, up by 3.97 per cent. Nagaraj Shetti from HDFC Securities suggested that the current weakness could be a buying opportunity, stating, “The present weakness is expected to be a buy on dips opportunity between 23900-23600 levels.”

Investors are now looking forward to key upcoming data releases, including the GDP data on Friday and the US Federal Reserve minutes. Tejas Shah from JM Financial & BlinkX warned, “It would be interesting to see whether follow-up selling occurs today or not.”

The broader market indices showed more resilience, with Nifty Midcap Select and Nifty Next 50 showing relatively smaller declines compared to the benchmark indices. As the market navigates through global economic uncertainties, investors are advised to remain cautious and focus on stock-specific opportunities.