Indian equity markets witnessed a sharp sell-off on Thursday, with the BSE Sensex plummeting 964.15 points to close at 79,218.05, marking a significant decline of 1.20 per cent. The broader NSE Nifty 50 index also experienced heavy losses, dropping 247.15 points or 1.02 per cent to settle at 23,951.70.
Dr Reddy’s topped the gainers’ list with a significant rise of 4.04 per cent, followed by Cipla, up by 2.15 per cent; BPCL, gaining 2.05 per cent; Sun Pharma, at 1.12 per cent; and Apollo Hospitals, rising 1.04 per cent. On the losing side, Bajaj Finserv dropped the most, down by 2.33 per cent, closely followed by JSW Steel, down by -2.31 per cent, Bajaj Finance, declining 2.25 per cent, Grasim, at -2.20 per cent, and Asian Paints slipping 2.15 per cent.
The market-wide rout was evident in the broader market participation, with decliners outnumbering advancers by a considerable margin. Out of 4,095 stocks traded on the BSE, 2,312 declined, 1,682 advanced, and 101 remained unchanged. The market witnessed 221 stocks reaching their 52-week highs, while 56 stocks touched their 52-week lows.
The banking and financial services sectors bore the brunt of the selling pressure, with the Nifty Bank index falling 563.85 points, or 1.08 per cent, to close at 51,575.70. The Nifty Financial Services index saw an even steeper decline of 1.21 per cent, settling at 23,906.60.
The mid-cap segment showed relative resilience, with the Nifty Midcap Select index ending marginally lower by 0.03 per cent at 13,027.20. The Nifty Next 50 index declined by 0.88 per cent to close at 70,625.70.
Vinod Nair, Head of Research at Geojit Financial Services, attributed the broad-based decline to global factors, saying, “The Indian market saw a widespread decline following a global sell-off driven by the US Fed’s hawkish stance on interest rates. Sectors sensitive to interest rates, such as banking and real estate, significantly bore the brunt.”
The Bank of Japan’s decision to maintain steady interest rates partially supported the market sentiment. “The BoJ’s decision to keep its interest rate steady, which surprised economists, aided in reducing the selling pressure. Despite this, investor caution persisted amid ongoing FII selling, with a strategic shift towards defensive sectors like pharma as evidenced by their outperformance,” Nair added.
The market’s volatility was further amplified by circuit filters being triggered for numerous stocks, with 331 stocks hitting the upper circuit and 225 stocks touching the lower circuit during the trading session.
Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd, highlighted the impact of global factors on domestic markets, noting, “Markets were plundered tracking negative global cues as benchmark indices slipped below their psychological levels on broad-based selling after the US Fed’s hawkish stance raised concerns over further rate cuts next year.”
The pressure on Indian markets was compounded by currency market dynamics, with Tapse adding, “Rising US bond yields has pushed global currencies, including the rupee to new lows while renewed foreign fund outflows from domestic equities could prompt investors to turn risk averse.”
The market opened significantly lower than the previous day’s close, with the Sensex starting at 79,029.03 versus its previous close of 80,182.20, while the Nifty opened at 23,877.15 versus its previous close of 24,198.85. This indicates the bearish sentiment that persisted throughout the trading session.
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Published on December 19, 2024
https://www.thehindubusinessline.com/markets/stock-markets/sensex-plunges-964-points-as-feds-hawkish-stance-sparks-market-sell-off/article69004258.ece
