Sensex slips over 400 points: What's behind today's decline?
What's the story
India's benchmark indices, the Sensex and Nifty, are trading in the red once again. The fall comes after a strong rally in the previous session when markets rose by 1.6%. At around 1:15pm on Wednesday, the Sensex was down by 402.85 points or 0.55% at 72,630.93 while Nifty slipped by a similar margin to trade at around 22,572.75.
Market dynamics
Financial stocks continue to weigh on market
The broader market showed mixed trends with small-cap indices trading marginally higher while mid-cap indices were trying to recover.
In the key 50-stock index, financial stocks continued to weigh on the market. ICICI Bank and Shriram Finance were major contributors to this decline, each down by nearly 1%.
HDFC Bank, which was earlier in the green during the session, also lost its gains later in the day.
Financial strain
NBFCs face major pressure in market
Non-banking finance companies (NBFCs) are facing major pressure in the market.
Cholamandalam Investment and Finance Co. fell by nearly 3% to become one of the top losers in the Nifty 200 index.
Other major players such as L&T Finance, Bank of Maharashtra, and Bajaj Finserv also witnessed a decline of around 2% each.
The Nifty Financial Services Ex-bank index was the biggest loser among sectoral indices.
Market influences
Factors contributing to market downturn
Several factors are contributing to the current market downturn. Profit booking is one of them, after markets rose 1.6% on Tuesday.
FIIs have also continued their selling spree for 13 consecutive sessions with net sales of around ₹1,305 crore yesterday.
Rising crude oil prices and India VIX's rise over 2% to 14.43 after a previous session's fall of 7%, are other factors affecting today's market performance.