Dalal Street Dives: Sensex Plunges 1,400 Points
Friday witnessed a significant downturn in the Indian stock market, with both the Sensex and Nifty experiencing sharp declines of nearly 2%. Market watchers described it as a continued "bloodbath" on Dalal Street, as the S&P BSE Sensex plummeted over 1,400 points, and the Nifty50 dropped below the 22,150 mark. The primary drivers behind the steep fall were cited as growing anxieties over a potential global trade war and ongoing selling pressure from foreign investors.
The Sensex ultimately closed 1,414 points lower (a 1.9% drop) at 73,198, while the Nifty saw a decrease of 420 points (1.86%), finishing at 22,124. The financial impact of the day's trading was substantial, with an estimated ₹9 lakh crore in market value erased, bringing the total market capitalization of companies listed on the BSE down to ₹384.22 lakh crore. Adding to the concerning trends, the Nifty recorded its fifth consecutive month of losses, marking its longest negative streak in 29 years, according to financial historians.
A major contributor to the day's losses was the information technology sector. The Nifty IT index experienced a significant 6.5% crash, reportedly triggered by an overnight drop in the stock price of US-based tech giant Nvidia. Prominent IT firms, including Tech Mahindra, Wipro, and Mphasis, were among those most severely impacted. The automotive sector also suffered, with the Nifty Auto index falling nearly 4%. Other sectors, spanning banking, metals, media, fast-moving consumer goods (FMCG), pharmaceuticals, and oil & gas, saw declines ranging from 0.7% to 3.5%.
Vinod Nair, Head of Research at Geojit Financial Services, attributed the sharp market decline to a combination of weak global cues and heightened bearish sentiment. He specifically pointed to concerns regarding the impending implementation of a 25% tariff on US imports from Canada and Mexico, slated for the following week, alongside an existing 10% tariff on goods from China. Nair also highlighted the uncertainty caused by the potential for tariffs on goods from the European Union. He suggested that investors are now keenly awaiting the release of India's Q3 GDP data, viewing it as a crucial indicator of the country's economic recovery path and a potential influence on future market direction.
Rupak De, Senior Technical Analyst at LKP Securities, offered a technical perspective on the Nifty's performance. He noted the index's substantial decline and consolidation breakdown. While acknowledging the bearish trend indicated by the Relative Strength Index (RSI), De also pointed out that it had entered the oversold territory. De projected that the Nifty might find support in the 21,800-22,000 range in the near term. He believes a sustained move above 21,800 could signal a significant recovery, whereas a failure to maintain that level could lead to another sharp fall.
DISCLIMER: Prameya or Prameya News7 does not endorse the views or recommendations expressed by experts/brokerages in this article. These are solely their opinions. Readers are advised to consult with a qualified financial advisor before making any investment or trading choices.
