Stock Market Plunges Amid Weak Q1 Earnings: Factors Behind Fall

At 2.00 PM, the Nifty 50 index was trading at 19, 810, down 0.84 per cent or 169 points. The BSE Sensex was trading at 66,943, down 628 points or 0.93 per cent

The two key equity benchmarks, Sensex and Nifty, slipped after IT bellwether Infosys cut its FY24 outlook to 1-3.5 per cent in constant currency from the earlier 4-7 per cent forecast in the previous quarter. 

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Amid weak global cues and first-quarter results, the equity market plunged into negative territory during Friday intraday trade, ending the strong market rally seen over the last few sessions. The two key equity benchmarks, Sensex and Nifty, slipped after IT bellwether Infosys cut its FY24 outlook to 1-3.5 per cent in constant currency from the earlier 4-7 per cent forecast in the previous quarter. 

 

At one point during the session, the S&P BSE Sensex was down over 700 points, while the Nifty quoted lower than 19,800. At 2.00 PM, the Nifty 50 index was trading at 19, 810, down 0.84 per cent or 169 points. The BSE Sensex was trading at 66,943, down 628 points or 0.93 per cent.

 

Shares of Infosys declined over 8 per cent to Rs 1,326.30 a piece on BSE. That apart, HCL Tech, Wipro, Tech M, TCS, HUL, Ultratech Cement, Reliance Industries, Bharti Airtel, and HDFC Bank were the other top laggards, declining up to 3.6 per cent. However, L&T, SBI, Kotak Bank, Power Grid, Axis Bank, and Tata Motors added up to 2.6 per cent. 

 

In the broader market, the BSE MidCap and SmallCap indices declined 0.3 per cent and 0.07 per cent, respectively.

Weak global cues and selling from domestic institutional investors also hurt sentiments.

Stocks were sold almost every sector, with the exception of a few, the most notable were PSU banks, media, and real estate. The Nifty Smallcap 100 outperformed, but the midcap index went down.

Here Are Some Of The Factor Behind The Crash 

• As per analysts the biggest demoralising aspect of the market today was Infosys' downward revision of guidance, which harmed practically every segment of the industry. As per a Bussines Standard, Osho Krishan, Senior Analyst at Angel One said that the revised revenue growth guidance of Infosys for FY24 led to some pessimism in the counter which tanked nearly 9 per cent in the day and dampened the overall sentiments. The Nifty IT index plunged nearly 4 per cent, which is a major cause for the correction in Nifty50 in today's trading session.
• Gaurav Bissa, VP, InCred Equities, as per MoneyControl underlined that the stock has reversed from a descending trendline hurdle on the weekly charts. However, the stock is currently trading above the previous swing low of 1250.
• Another contributor to this negative session was the heavyweights like RIL and HUL. Reliance Industries was hit hard after news of the demerger of its financial services arm, bleeding nearly 1000 points. Hindustan Unilever sharply declined after Q1 results. The company's domestic volume growth came at 3 per cent, missing analysts estimates significantly, as per the reports. 
• Week global markets also contributed to the stock market plunging on Friday. As per reports, after nearly 40 per cent gains since the beginning of the year, the Nasdaq suffered its largest one-day loss since March on July 20, pulled down by strong post-earnings drops in tech firms Tesla and Netflix. Nikkei fell 0.6 per cent. China's blue chips also fell 0.2 percent, while Hong Kong's Hang Seng rose 0.4 per cent.