Sensex tumbles over 1,000 points: What is behind today's fall?
What's the story
The Indian stock market took a hit on Tuesday morning, wiping out the gains from the previous day. An hour after opening bell, the BSE Sensex was trading at 81,416 after losing 1.23% or 1,013 points The Nifty50 index also saw a dip of 1%, losing 259 points to trade at around 24,665.
Market performance
IT, bank stocks lead market decline
The latest fall in the stock market comes after a ceasefire agreement with Pakistan over the weekend. The agreement had first resulted in a spike in the indices on Monday. However, today witnessed a reversal of those gains, with IT and bank stocks leading the losses among Sensex constituents. Infosys, Kotak Mahindra Bank, Power Grid, and ICICI Bank opened lower by up to 2%.
Investor activity
Foreign investors boost market despite recent decline
Despite the recent decline, FPIs had bought Indian equities worth ₹1,246 crore on Monday. So far this month, FPIs have invested $1.7 billion in Indian markets on the back of optimism over domestic growth and a weaker dollar. This influx of foreign investment has been a major factor supporting the market despite today's downturn.
Sectoral impact
Sectoral indices and individual stocks react to market conditions
Most sectoral indices on the NSE were trading lower. Nifty Bank, Auto, Financial Services, FMCG, IT, Realty, and Oil & Gas indices fell by up to 1%. Meanwhile, Nifty Pharma and PSU Bank gained 1.8% and 0.6% respectively. Among individual stocks, Paytm dropped by 5% after Ant Financial sold a stake in the company via a block deal.
Global impact
Global markets respond to US-China trade agreement
Asian stocks joined a global rally on Tuesday as investors reacted positively to a temporary halt in the trade war between the US and China. Japan's Nikkei soared by 2% while tech-heavy Taiwan also rose by 2%. The MSCI's broadest index of Asia-Pacific shares outside Japan reached a six-month peak following the news of reduced tariffs between the two countries.