Sensex down over 1,700 points today: Here we decode why
What's the story
The Indian stock market witnessed a crash today, with benchmark indices Sensex and Nifty plummeting sharply. The fall was largely driven by weak global cues as the conflict in West Asia entered its fourth week, pushing crude oil prices higher. Foreign fund outflows also weighed on investor sentiment. At 11:25am the Sensex was down by over 1,766 points or 2.37% at 72,766.84, while Nifty fell over 566 points or 2.45% to trade at around 22,548.30.
Market overview
HDFC Bank, SBI among top losers
The market breadth remained weak with 592 stocks advancing, 2,990 declining and 153 remaining unchanged. Major sectoral indices were all in the red. HDFC Bank's shares fell by some 2.5% after a two-session decline of over 7% following the resignation of its part-time chairman Atanu Chakraborty. SBI's shares also fell by 3.6% after receiving a tax demand from the Income Tax Department for assessment year 2024.
Broader impact
Broader indices also fall sharply
The broader indices also witnessed a sharp fall with Nifty Smallcap 100 and Nifty Midcap 100 falling by some 3.82% and 3.45%, respectively. The volatility index (VIX), which measures the market's expectation of near-term volatility, jumped by a whopping 15% to the 26 level, its highest since early June 2024. This spike suggests increased uncertainty and risk aversion among the investors, often leading to sharp market swings and selling pressure.
Market prediction
Nifty may test levels of around 22,560 in near term
Analysts expect the Nifty to test lower levels of around 22,560 in the near term before any consolidation. A move above 23,179 mark would be required for a recovery. "The widening of the lower Bollinger band, following the wild moves last week, forces us to bring 22,000 back into the picture," said Anand James, Chief Market Strategist at Geojit Investments.