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Sensex, Nifty fall sharply: Key 5 factors dragging the headline indices lower

Sensex, Nifty fall sharply: Key 5 factors dragging the headline indices lower

The 30-share pack BSE Sensex dropped about 617 points, or 0.83 per cent to settle at 73,502.64. NSE's Nifty50 tanked about 161 points, or 0.72 per cent to end the session at 22,332.65.

Pawan Kumar Nahar
Pawan Kumar Nahar
  • Updated Mar 11, 2024 4:13 PM IST
Sensex, Nifty fall sharply: Key 5 factors dragging the headline indices lowerThe BSE smallcap index dropped more than 2 per cent for the day, while the midcap index settled one-fourth per cent down.

Domestic equity market settled sharply lower during the trading session on Monday on the back of a host of domestic and global factors. Weakness in the global markets, hammering of select index heavyweights and valuation concerns over the broader markets weighed on Dalal Street sentiments. The 30-share pack BSE Sensex dropped about 617 points, or 0.83 per cent to settle at 73,502.64. NSE's Nifty50 tanked about 161 points, or 0.72 per cent to end the session at 22,332.65. The BSE smallcap index dropped more than 2 per cent for the day, while the midcap index settled one-fourth per cent down. Fear gauge India VIX hit 14-level, rising 3 per cent. Continued selloff in global markets due to uncertainty over rate cuts impacted the domestic market sentiment, which is currently at an overbought level, said Vinod Nair, Head of Research, Geojit Financial Services. "The stronger than expected US nonfarm payroll data and caution ahead of the release of US inflation data tomorrow kept investors on the edge. The broader market continued its underperformance due to valuation concerns, while investors are rebalancing their portfolios to include safe haven assets like gold," he said. Here are the key five reasons that dragged the headline indices lower today:Weakness in global markets Asian share markets sputtered on Monday while the dollar looked vulnerable ahead of a reading on U.S. inflation that could hasten, or delay, the start of global rate cuts. The S&P 500 and Nasdaq closed lower on Friday after touching record highs during the session.US economic data The US will announce its consumer price index (CPI) data on Tuesday, March 12 for February, which is forecasted to rise 0.4 per cent for the month and keep the annual pace steady at 3.1 per cent. Core inflation is seen rising 0.3 per cent, which will give cues for the rate cuts by the US Federal Reserve, which is currently in jeopardy. Major equity indices slumped into the red today mirroring weak cues from global markets ahead of key US inflation data due tomorrow that might influence the Fed's rate trajectory, said Avdhut Bagkar Technical and Derivatives Analyst, StoxBox.Selling in heavyweight, Tata Stocks Selling pressure in index heavyweights dragged the headline indices lower. Out of the 617 points falling in the BSE Sensex, top five contributors- HDFC Bank, Reliance Industries, ICICI Bank, Infosys and State Bank of India cumulatively contributed about 375 points. Tata Group stocks including Tata Steel and Tata Motors were also marred as the anticipated IPO of Tata Sons went in limbo. After lingering in negative territory for most part of the trading session, markets ended with steep losses after selling intensified towards the fag-end. Weak global cues contributed to the overall weakness as local investors cut their exposure to banking, telecom, power and realty stocks, said Prashanth Tapse, Senior VP (Research), Mehta Equities. "The market is in a volatile phase due to uncertainty over global interest rate cut, geo-political tensions and sluggish growth in key economies, which is forcing investors to cash out of their investments at regular intervals," he added.Sebi's red flags There may be pockets of irrational exuberance in the Indian equity markets, the markets regulator said on Monday, referring to concerns over stretched valuations of small and midcap stocks and large inflows into mutual funds investing in these segments. The Sebi has suggested mutual fund trustees look at whether lump sum investments into the small- and mid-cap funds are appropriate.Technical Outlook Rupak De, Senior Technical Analyst, LKP Securities said that the Nifty has been fluctuating within an ascending channel, displaying a pattern of higher highs and higher lows. The overall trend continues to be bullish, although there is currently an intermediate corrective phase in progress. "In the short term, Nifty could experience weakness, possibly leading to a decline toward the range of 22,200-22,250. Looking at the upside, immediate resistance is identified at 22,400 based on closing prices," he added.  

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Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
Published on: Mar 11, 2024 4:13 PM IST
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