Sensex plunges 1,200pts, Nifty dips below 24k; key reasons for market crash

Stock market crash: Indian bourses were facing a bear attack again on Thursday owing to a weakness in the global markets and after surging significantly in the first two sessions of the ongoing week

Stock market crash: After starting the day on a flattish note with a positive bias, the benchmarks showcased heightened volatility, with the BSE’s 30-stock bluechip index, Sensex dropping 1,529 points or 1.90 per cent at 78,918.92, from its day’s high of 80,447.40 on Thursday. Meanwhile, the NSE’s Nifty50 fell 472 points or 1.93 per cent at 23,873.35 level from its day’s high of 24,345. 

  At close, the BSE Sensex plunged 1,190 points or 1.48 per cent at 79,043.74, while the NSE's Nifty50 tanked 360 points or 1.49 per cent at 23,914.15 level. 

 

Indian bourses were facing a bear attack again on Thursday owing to a weakness in the global markets, Nifty50's monthly expiry and after surging significantly in the first two sessions of the ongoing week, suggested analysts. 

 

“Today’s market fall is led by US markets falling overnight and no new fresh positive triggers in the domestic markets, also the benchmarks have risen significantly in the past few days post which this seems a normal correction,” said Deepak Jasani, head of retail research at HDFC Securities. 

 

This week’s trend is likely to sustain in the coming weeks according to Jasani as he sees the market moving upwards in the coming weeks but with some corrections in between.

 

Meanwhile, the index heavyweights that pulled the BSE Sensex down on Thursday in terms of contribution included Infosys contributing 208 points. Other index giants included Reliance Industries (126 points), HDFC Bank (118 points), ICICI Bank (94 points) and Mahindra and Mahindra (85 points). 

 

29 out of 30 stocks closed in the red territory on the BSE Sensex with Infosys being the top loser, falling up to 3.46 per cent intraday and was followed by Mahindra and Mahindra (down 3.3 per cent), Bajaj Finance (down 2.8 per cent), Adani Ports (down 2.7 per cent) and HCL Tech (down 2.5 per cent).

 

Among sectoral trends, most sectors trading were trading in red with Nifty IT index under severe stress falling up to 2.4 per cent. 

 

Individually, shares of Infosys fell the most in intraday deals, dropping 3.06 per cent at Rs 1,865.75 per share intraday, followed by L&T Technology Services also dropping 3 per cent at Rs 5,268 per share. Tech Mahindra shares also fell 2.84 per cent at Rs 1,706.80 a piece, while HCL Tech slipped to day’s low of Rs 1,849, down 2.2 per cent in intraday trade.   Also Read: Why Nifty IT index fell 2% after two straight sessions of lifetime highs? 

 

Other IT stocks such as LTIMindtree, Mphasis, Wipro, Persistent Systems, TCS and Coforge also fell in the range of 1-2 per cent each. 

 

The fall in Nifty IT index was followed by Nifty Auto, down 1.30 per cent, and Consumer Durables, falling 1 per cent. Others such as Nifty Pharma, Nifty Private Bank, Nifty Healthcare and Nifty Financial Services also fell up to 1 per cent each in intraday deals. 

   

In contrast, the broader markets bucked the downturn trend of benchmarks with the BSE SmallCap index up 1.18 per cent at 55,209 level intraday, while the BSE MidCap index rising 0.70 per cent at 44,050.21 intraday.

 

Technical View 

According to Technical pundits, today being the F&O expiry day has brought a lot of volatility in the market. They say a technical close below 23,800 would be a make-or-break level for Nifty.  "I expect markets to trade sideways with negative biased pressure. On the resistance side, 24,350 acts as strong resistance; any close above this can turn the market mood,” said  Prashanth Tapse, senior VP (Research), Mehta Equities.   

  Moreover analysts said that the index falling below the crucial support level of 23,940 makes the sentiment weak, with a possibility of further correction.  "On the daily chart, the index has closed a gap it created recently. In the short term, if the Nifty falls below 23,870, it might continue declining toward 23,500. However, if it sustains above 23,870 and does not make a lower low, it could witness a sharp recovery toward 24,200 and higher," said Rupak De, senior technical analyst at LKP Securities. 

 

Global markets

 

The downturn in Indian stocks came amid a similar show in the US markets as overnight in the US, a pullback in major technology stocks led to a lower close for the markets in a thin trading session.

 

Nvidia, a leading chipmaker, dropped over 1 per cent, while Meta Platforms fell by 0.8 per cent. Shares of Dell and HP saw significant declines, with Dell down more than 12 per cent and HP falling over 11 per cent after both companies issued disappointing earnings forecasts.

 

The S&P 500 declined 0.38 per cent, ending a seven-day winning streak. The Nasdaq Composite dropped 0.6 per cent, while the Dow Jones Industrial Average lost 0.31 per cent.

 

Meanwhile, markets in the Asia-Pacific region were trading mixed on Thursday, with South Korea's blue-chip Kospi index trading near flatline while the small-cap Kosdaq gained 0.35 per cent. 

 

Japan's Nikkei 225 surged 0.56 per cent, and the broad-based Topix was up by 0.82 per cent. 

 

Australia's S&P/ASX 200 was trading 0.45 per cent higher. Meanwhile, Hong Kong’s Hang Seng index lost 1.33 per cent.