Benchmark indices Nifty and Sensex tumbled to nearly three-month lows as mounting concerns fueled a sell-off and allowed bearish sentiment to take hold. This decline marks the fifth consecutive session of losses for both indices, triggered by the latest inflation data, which revealed a 14-month high of 6.21 per cent, surpassing the Reserve Bank of India's upper tolerance limit. Amid rising inflationary pressures and growing caution among investors, the market remains under a persistent cloud, with traders awaiting relief.
At 10 am, the Sensex fell by 183.53 points, or 0.23 per cent, ending at 78,491.65, while the Nifty dropped 94.10 points, or 0.39 per cent, to close at 23,789.40. Among the broader market, 618 stocks advanced, 2,491 declined, and 98 remained unchanged.
NTPC, HUL, Tata Motors, Bharti Airtel, and Bajaj Finance were the top gainers on the BSE Sensex. Losers included M&M, Tata Steel, JSW Steel, Maruti and TCS.
Mid- and small-cap indices followed the broader market’s downward trend, falling 0.5 per cent and 0.6 per cent, respectively. These segments, which have surged nearly 25 per cent year-to-date compared to Nifty’s 13 per cent gain, showed signs of fatigue. Meanwhile, the India VIX, a gauge of market volatility, climbed over 2 per cent, reaching the 15-level mark.
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said, “A significant feature of this year’s market movements is the big variation across countries and regions. The US is, by far, the best performing market with 26.17 per cent YTD returns in S&P 500. India is now underperforming with only 9.85 per cent YTD returns in Nifty. The Euro Zone index Stoxx 50 has given only 5.14 per cent YTD returns. The performance of the economy and expectations around earnings growth are the main factors behind this variation in performance. The US economy continues to be resilient, India is facing growth concerns and the Euro Zone is very weak. The Trump victory has added an element of high volatility to markets.”
“From the emerging market perspective, the rise in the dollar index and the sharp spike in the US 10-year bond yield to 4.42 per cent are causes of concern. Such high yields in US bonds will facilitate more outflows from emerging markets to the US. This will continue to be a headwind for India. Investors should be cautious in investing in sectors like cement, metals and petroleum refining which are facing growth slowdown. Safety is sectors like banking, new age digital companies, hotels, pharma and IT where growth prospects are good,” he added.