Sensex tumbles over 500 points: What's behind today's fall?
What's the story
The Indian stock market witnessed a sharp decline on Friday, with the Sensex and Nifty falling over half a percent. The fall comes after a six-day rally and is mainly attributed to profit booking and renewed foreign fund outflows. At around 2pm, the Sensex had plummeted by 527.99 points or 0.62% to trade at 84,028.41 while the Nifty fell to 25,733 after losing 158.4 points or about 0.61%.
Sector performance
Sectors that witnessed profit booking
In the wake of profit booking, several sectors witnessed a decline. Banking, financial services, FMCG, IT and auto stocks were among those that saw profit booking after recent gains. The market rally that started on strong note yesterday over an imminent trade deal between India and the US lost steam mid-way. This was due to lack of confirmation from Indian side on positive news regarding trade deal.
FII activity
FIIs turn sellers, India VIX rises
Foreign Institutional Investors (FIIs) also contributed to the market decline by turning sellers on Thursday. They offloaded equities worth ₹1,165.94 crore, ending a five-day buying spree. The India VIX, which indicates market volatility and investor sentiment, rose nearly 1% to 11.84. This suggests an increase in near-term uncertainty in the Indian stock market.
Market forecast
Near-term outlook for Nifty
Anand James, Chief Market Strategist at Geojit Financial Services, has predicted sideways movement for Nifty in the near term. He said if dips are contained above 25,830/25,780 levels, attempts to pull back toward 26,186 could emerge. However, a vertical rise is less expected. If pullback attempts fail to clear the 26,000 mark, then downsides may resume aiming toward lower levels of around 25,590-25,400 range.