The Indian stock market faced a rough day today, with the BSE Sensex and NSE Nifty taking notable hits. This downward trend is largely due to Foreign Institutional Investors (FIIs) selling off their positions as they prepare to close their books for the year.
BSE Sensex and NSE Nifty Performance Snapshot :
- The BSE Sensex fell sharply, losing 973.67 points (1.2%) to hit a day’s low of 80,639.97.
- The NSE Nifty 50 dropped 300 points (1.2%), trading at 24,323.60 from its session high.
Ajit Mishra from Religare Broking explained that the sell-off is a result of FIIs cashing out their profits and possibly redirecting their funds to the US markets, where they expect strong returns and policy rate cuts. On the brighter side, Domestic Institutional Investors (DIIs) are stepping in to buy during the dips, providing some stability.
Sectoral Performance:
- Broader markets, including the Nifty Midcap 100, initially showed strength but later succumbed to the selling pressure, falling 450 points (0.8%) to trade at 59,204.30.
- The Nifty Bank index also dipped, losing 780 points and trading at 52,735.95.
Key Contributors to the Fall:
Heavyweights like HDFC Bank, Reliance Industries, Bharti Airtel, ICICI Bank, and TCS were significant contributors to the decline. Shriram Finance was among the biggest losers, dropping 4.8%, followed by Bharti Airtel, Grasim Industries, JSW Steel, and Hero MotoCorp.
IT Stocks:
Selective IT stocks saw profit-booking as investors stayed cautious ahead of the US Federal Reserve’s policy decision. Global market sentiment remains sensitive to upcoming Fed signals regarding interest rates.
Technical View:
Rupak De from LKP Securities noted that the Nifty declined sharply after forming a bullish harami pattern yesterday, indicating that market sentiment is currently weak despite this potentially bullish signal.
Key Points to Remember:
- The Sensex dropped by 973 points to 80,639.97.
- The Nifty 50 fell 300 points to 24,323.60.
- FIIs selling and year-end profit booking were the primary drivers of the downturn.
- Broader markets and sectoral indices also faced losses, with Nifty Bank and Nifty Midcap 100 trading lower.
As FIIs continue to realign their portfolios ahead of the year-end, all eyes are on the global cues, especially from the US markets and Federal Reserve policy outcomes. Investors should brace for some volatility in the near term.