Sensex falls nearly 750 points: What's behind today's decline?
What's the story
The Indian equity markets opened on a weak note on Thursday, with the Sensex and Nifty both witnessing profit booking after a sharp rally in the previous session. At the time of writing, the Sensex was down by nearly 750 points or 1% at 76,815 while Nifty fell by some 183 points to trade at around 23,814. The decline comes after a five-day winning streak for the markets.
Market dynamics
Sectoral indices and stocks in early trade
The cautious sentiment in the Indian markets can be attributed to mixed global cues and rising crude oil prices. Most sectoral indices opened in the red, with Nifty IT index falling by 1.4%. Banking, auto, and realty indices also witnessed a decline of up to 0.7% each. Broader markets remained subdued as midcap and smallcap indices slipped by up to 0.4%.
Stock performance
Top gainers and losers on Nifty
Defensive and select PSU stocks witnessed buying interest in the early trade. NTPC, Bharat Electronics, and Power Grid emerged as top gainers on the Nifty index. However, financials and heavyweights led the losses with Bajaj Finance, Shriram Finance, and Adani Ports falling over 2% each. IT majors also came under pressure with Infosys declining nearly 2% while HCL Technologies was down by over 1%.
Future prospects
Market entering a consolidation phase
The market is said to be entering a consolidation phase after Wednesday's sharp upmove, with profit booking at higher levels weighing on sentiment. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, noted that the previous rally was driven by short covering and buying in attractively valued financials following the ceasefire-triggered fall in crude oil prices. He further added that while macro conditions remain supportive, the sustainability of this uptrend will depend on the durability of ceasefire and crude oil trajectory.