Key reasons why Sensex fell 1,273 pts from day's high, Nifty below 23,900

Stock market crash: After opening in green on Tuesday, November 12, 2024, the key benchmark indices – Sensex, Nifty bled heavily with the BSE Sensex dropping 1,273 points or 1.59 per cent at 78,547, from its day’s high of 79,820. Meanwhile, the NSE’s Nifty50 slipped 403 points or 1.66 per cent at 23,839 level from its intraday high of 24,242 level.   At the closing bell, however, the BSE Sensex ended 821 points, or 1.03 per cent lower, while the NSE's Nifty50 closed at 23,883, down 257 points or 1.07 per cent.  

The Indian bourses were fighting the bears again on Tuesday on account of increased selling by foreign institutional investors, subdued quarterly earnings of companies, weakness in auto majors, banks and financial services.  "FII-triggered selling pressure continued to impact the domestic market. The recent strengthening of the dollar, driven by aggressive ‘Trumponomics’ is adding fears. Additionally, the anticipated rise in domestic inflation, due to increasing food prices, along with depreciating INR, may influence the RBI’s monetary policy. Most sectors were in the red, while IT stocks gained on expectations of increased US IT spending," said Vinod Nair, head of research, Geojit Financial Services

 

 

The index heavyweights that pulled the BSE Sensex down on Thursday in terms of contribution included HDFC Bank contributing 291 points. Other heavyweights included, SBI (59 points), NTPC (38 points), Bajaj Finance  (33 points) and Tata Motors (31 points).   Shree Cement hits 52-week low, down 4% on disappointing Q2 results

 

22 out of 30 stocks were under pressure on the BSE Sensex with HDFC Bank being the top loser, falling up to 2.53 per cent intraday and was followed by Asian Paint (down 2.4 per cent), NTPC (down 2.4 per cent), SBI (down 2.2 per cent) and Tata Motors (down 2.1 per cent)

 

Among sectoral trends, most sectors were trading in red except Nifty IT (up 0.36 per cent), and Nifty Realty (up 0.94 per cent). The ones under severe stress included Nifty PSU Bank falling up to 1.48 per cent, followed by Nifty Auto, down 1.40 per cent, and Nifty Financial Service, falling 1.34 per cent. Others such as Nifty FMCG, Nifty Bank and Nifty Consumer Durables also fell around 1 per cent each in intraday deals. 

 

The broader markets were also feeling selling pressure with BSE SmallCap index down 0.55 per cent at 53,986.37 level intraday, while the BSE MidCap index fell 0.45 per cent at 45,507.95 intraday.  Britannia dips 9% in 2 days, hits over 5-mth low; brokerages mixed 

 

According to analysts, two strong factors have been at play in this consolidating market. This includes the relentless selling by FIIs that has been favouring the bears and pulling the market down. And, second is the sustained buying by DIIs has been supporting the market and preventing a market crash.  HG Infra Engineering share price slips 8% as Q2 net profit plunges 16% YoY

 

“It is important to note that the intensity of FII selling is coming down (On November 11 FII selling was Rs 2026 crores) and the inflows into mutual funds is steadily increasing which will enable DIIs to continue buying. Monthly flows into equity mutual funds have touched an all-time high of Rs 41,887 crores in October clocking a 22 per cent month-on-month increase," said  Dr V K Vijayakumar, chief investment strategist, Geojit Financial Services.

 

Technical View

As per technical analysts, the underlying trend of Nifty remains choppy with weak bias. “The market is moving in a broader high low range of 24,600-23,800 levels. Having declined from the upper range recently, Nifty is expected to witness upside bounce from near the lower range of 23,800 levels in the short term. Immediate resistance to be watched around 24,300,” said Nagaraj Shetti, senior technical research analyst at HDFC Securities.   Hyundai Motor India shares drop 3% on weak Q2 numbers; profit tanks 16% YoY 

 

Global markets

The downturn in the Indian market came amid a similar show in the Asia-Pacific markets with Japan's Nikkei 225 trading 0.40 per cent lower, while the broad based Topix index trading flat. 

 

South Korea’s Kospi dropped 1.94 per cent and the Kosdaq fell 2.51 per cent. Australia's S&P/ASX 200 was down 0.13 per cent. Hong Kong’s Hang Seng index slipped 2.84 per cent  Stock Market  Updates

 

However, overnight in the US, stocks continued their upward trend overnight on Monday Friday, with the Dow gaining 0.69 per cent, while the S&P 500 rose 0.1 per cent, and the Nasdaq added just 0.06 per cent.