Bourses post worst day in nearly two months on IT stocks’ decline

The 30-share Sensex slumped 1,190.34 points or 1.48% to settle at 79,043.74. During the day, it had dropped as much as 1.63%. The wealth of investors on the Sensex fell by Rs 1.5 lakh crore. Meanwhile, the 50-share NSE Nifty fell 360.75 points or 1.49% to 23,914.15.

Bengaluru: Benchmark indices BSE Sensex and NSE Nifty dropped nearly 1.5 per cent on Thursday, pulled down by selling in IT heavyweight stocks on back of fresh uncertainty over the trajectory of rate cuts in the United States, and due to investors adjusting their positions as monthly derivative contracts expired. 

This was the steepest intra-day decline for the indices in nearly two months.

The 30-share Sensex slumped 1,190.34 points or 1.48 per cent to settle at 79,043.74. During the day, it had dropped as much as 1.63 per cent. The wealth of investors on the Sensex fell by Rs 1.5 lakh crore. Meanwhile, the 50-share NSE Nifty fell 360.75 points or 1.49 per cent to 23,914.15.

“Domestic markets took a breather after a strong start to the week. The overnight sell-off in the US market, driven by renewed uncertainty about the rate cut trajectory and rising geopolitical tension, led to a correction in heavyweight IT and consumer discretionary stocks,” said Vinod Nair, Head of Research at Geojit Financial Services. 

Nair added that the broader market had outperformed the benchmark indices due to a shift in the stance of foreign institutional investors and domestic  investors, seeking opportunities in undervalued stocks.

“The Nifty slipped sharply during the day, falling below the crucial support level of 23,940. The sentiment looks weak, and further weakness seems possible from here,” said Rupak De, Senior Technical Analyst at LKP Securities.

In contrast to the rest of the market, shares of five of the eleven listed Adani Group firms ended higher on Thursday, with Adani Total Gas soaring nearly 16 per cent.

From the Sensex constituents, Mahindra & Mahindra, Infosys, HCL Technologies, Adani Ports, Bajaj Finance, Tech Mahindra, Titan, Tata Consultancy Services, Reliance Industries and Power Grid were among the laggards. State Bank of India was the only gainer.

The BSE smallcap gauge climbed 0.41 per cent while the midcap index dipped 0.06 per cent during the day

“Escalation in the Russia-Ukraine conflict and uncertainties over the US interest rate trajectory post mixed economic data releases dented sentiment,” said Siddhartha Khemka, head of Research, Wealth Management, Motilal Oswal Financial.

In Asian markets, Seoul and Tokyo settled in the green, while Shanghai and Hong Kong ended lower. European markets were trading higher. The US markets ended lower on Wednesday. The decline in tech companies dragged major American indices lower.