The markets saw a broad-based sell-off and the benchmark equities saw sharp losses. The Sensex nosedived 800 points or 1.06% to close at 74,244.90. The Nifty 50 closed 234.40 points or 1.03% lower at 22,519.40. The top stocks that dragged the indices down included Sun Pharma, Maruti Suzuki, Power Grid Corp, Titan, and ONGC. The Indian Volatility Index (India VIX) closed 3.78% higher.
The Nifty Bank closed the session 422 points lower at 48,564.55. The Nifty Midcap 100 lost 312.85 points or 0.62% to settle at 50,067.55. On the sectoral front, Pharma, PSU banks, and oil & gas stocks dragged the indices lower. In the broader indices, smallcap and midcap stocks closed in the red.
In the last five days, Nifty 50 rose 0.23%. While Sensex gained 0.14% in the same period. Nifty Midcap held its gains and rose 0.78% in the past five days. Similarly, Bank Nifty rose over 1% in the last five trading sessions.
Selling pressure in banking stocks
“The BankNifty index experienced significant selling pressure, marking a return of bearish momentum after a prolonged period. The index is currently facing strong resistance at the 49,000 mark, and only a decisive close above this level could revive the upward trend towards the 50,000 mark. Immediate support for the index is established at 48,000, where the highest open interest on the put side has been observed. A breach below this level could intensify the selling pressure,” said Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities.
Geo-political worries for market
Apart from the domestic cues, the global worries also weighed on sentiment. “US inflation soared by 0.4% MoM, surpassing expectations and triggering a spike in US Treasury yields. Investors are questioning the feasibility of the US Fed’s anticipated 3 rate cuts this year, leading to underperformance in EMs. Meanwhile, European markets excelled as the ECB maintained policy rates but hinted at a potential rate cut soon. Indian markets consolidated amidst worries over delayed US rate cuts, escalating Middle East tensions driving oil prices up, and subdued Q4 earnings projections,” said Vinod Nair, Head of Research at Geojit Financial Services.