Sensex Today: Indian benchmark equity indices trade lower on Thursday; Key points on why the market is falling today?
Bear bites: Sensex, Nifty trade with deep cuts
Indian benchmark equity indices declined on Thursday after global markets fell. The decline was mainly driven by losses in IT stocks, amid concerns over US President-elect Donald Trump’s policies and renewed uncertainty around the outlook for a US interest rate cut.
2:20 PM, BSE Sensex It fell 1,208 points (1.51%) to 79,025, while the NSE Nifty fell 358 points to 23,916. Investors will look to India’s GDP data due on Friday.
Among the Sensex stocks, Infosys, Tech Mahindra, M&M, HCL Tech, TCS, and PowerGrid were the top losers, falling as much as 3 percent. On the other hand, only SBI, Adani Ports, and Tata Motors managed to trade in the green.
Key factors behind today’s market decline:
IT and auto stocks drag
IT and auto stocks were the main drag on the Nifty, with the sectoral index falling 2.3% and 1.3% respectively. Shares of Infosys fell 3%, TCS shed 2.2%, Tech Mahindra shed 2.5%, and HCL Tech shed 2%, leading losses in the IT sector.
In the auto sector, Mahindra & Mahindra (-3.2%) and Eicher Motors (-2%) were the top losers.
The decline in IT stocks followed the release of US inflation data, which suggested a slower-than-expected pace of rate cuts. This has raised concerns about declining client spending, a key driver for Indian IT firms with significant exposure to the US market.
Global rate concerns weighing on sentiment
Krishna Rao, co-head of equity broking at JM Financial Services, said, “We expect markets to remain neutral due to slower rate cuts amid higher growth in the US, and the prospect of higher inflation following Trump’s presidential victory. will remain stable.” A possible delay in US rate cuts has added to uncertainty for emerging markets, weighing on investor sentiment.
A stronger U.S. dollar has also reduced the appeal of emerging market assets, and Asian equities are feeling pressure from recent dollar gains and growing concerns about rising trade tensions.
A cautious stance on the part of institutions, FIIs cannot become aggressive buyers
VK Vijaykumar, chief investment strategist at Geojit Financial Services, pointed out that majors are taking a cautious approach amid global uncertainty. “While the end of sustained FII selling is a positive sign, FIIs are unlikely to become aggressive buyers given the strong dollar and macroeconomic challenges in emerging markets,” he said. Vijay Kumar added that institutions are likely to wait for further clarification from the US President. Select Donald Trump’s policies and their impact on global trade.
Technical Resistance for Nifty
Nifty 50 continues to trade within a narrow range of 24,000 to 24,350, noted Mandar Bhojane, research analyst at Choice Broking. Technical indicators, such as the RSI momentum signal, suggest a possible bullish crossover, indicating an upward move. If the index holds above the 24,400 level, it is likely to move towards 24,800 or even 25,000. On the downside, immediate support levels are seen at 24,000 and 23,900.
Market Outlook
The ongoing correction in the market has brought valuations closer to reasonable levels, with the Nifty’s price-to-earnings ratio declining to an estimated 21x from October’s peak of 25.8. Anirudh Garg of Invasset PMS recommends increasing cash levels in portfolios, citing increased valuations. “Indian markets may need a breather from current levels,” he said.
While the lull in FII selling provides some relief, experts expect volatility to persist in the near future as markets follow global cues and policy changes.