Sensex, Nifty Lose Key Levels Amid Geopolitical Tensions
The BSE benchmark Sensex fell 523 points or 0.81 per cent to settle at 64,049. The broader NSE Nifty declined 139 points or 0.72 per cent to end at 19,130.
The market capitalisation of all listed companies on BSE declined by Rs 2.03 lakh crore to Rs 309.27 lakh crore. The market breadth was skewed in the favour of the bears. About 2,551 stocks declined 1,140 gained and 108 remained unchanged on the BSE.
Here are 3 top factors that triggered the market rout:
1) Global Markets: Nasdaq 100 Index futures dropped as Microsoft Corp. and Google’s parent Alphabet Inc. delivered a mixed picture of big tech earnings. Contracts on the Nasdaq sank 0.8 per cent and those on the S&P 500 were down 0.5 per cent. Europe’s stock benchmark was also weaker as earnings from some of the region’s biggest consumer-facing companies stoked concerns that a global economic slowdown is hurting corporate profits. 2) US bond yields: The 10-year treasury bond yields were up 0.20 per cent at 4.859 per cent. This triggered panic action on D-Street.
3) Financial stocks, IT and auto stocks lead fall: Selling pressure was seen across sectors with financials, IT and auto stocks playing spoilsport. These sectors have a significant weightage in both Nifty and Sensex.
The market fell despite the rupee's gains against the dollar and a pullback in the prices of crude oil. From the sectoral front, Nifty IT, Nifty Auto and Nifty Financial Services declined over 1 per cent each. Meanwhile, Nifty Realty and Media also plunged 2.1 per cent and 2.9 per cent, respectively.
FII and FPIs, on Wednesday, saw a net sales of Rs 4,236.60 crore in the cash segment. A total of Rs 13,312.21 crore was sold against a total purchase of Rs 9,075.61 crore. Domestic institutional investors saw a net purchase of Rs 3,569.36 crore in the cash segment. A total of Rs 6,069.19 crore was sold against a total purchase of Rs 9,638.55 crore.
Meanwhile, This correction is considered a routine occurrence within the framework of a structural bull market, characterized by a significant retreat following a period of exuberance in midcap, smallcap and SME sectors. This adjustment can be attributed, in part, to fluctuations in US bond yields and concerns surrounding the situation in Iraq, though these factors are largely seen as convenient excuses for the market's pullback. This could present an attractive buying opportunity for investors looking to participate in the anticipated pre-election rally.
Technically, the important key resistances placed in October Nifty future are at 19,130 levels, which could offer the market on the higher side. Sustainability above this zone would signal opens the door for a directional up move with immediate resistances seen at 19,202 – 19,303 levels. Immediate support is placed at 19,009 – 18,939 levels.
