As of 11:50 am, the Sensex recorded a dip of 579.42 points, settling at 71,692.52, while the Nifty50 saw a decline of 147.55 points, reaching 21,594.35. Below are some of the reasons that have put the benchmark stock market indices under pressure.
Analysts attribute the market weakness to a significant slump in IT, banking, and financial stocks. (Photo: Reuters)
New Delhi,UPDATED: Jan 2, 2024 12:27 IST
The domestic stock markets kicked off the year 2024 on a subdued note, witnessing a downturn after a strong run in the previous year. Both benchmark indices, the S&P BSE Sensex and NSE Nifty50, experienced a decline on Tuesday following modest gains in the initial trading session.
As of 11:50 am, the Sensex recorded a dip of 579.42 points, settling at 71,692.52, while the Nifty50 saw a decline of 147.55 points, reaching 21,594.35. Broader market indices also registered notable declines, accompanied by a slight uptick in volatility.
In this market correction, all Nifty sectoral indices posted declines, exceptStock for the pharma index, which managed to surge nearly 2 percent. Conversely, major sectoral indices such as Nifty IT, Nifty Bank, and Nifty Financial Services faced substantial declines, exerting downward pressure on the benchmark indices.
Dalal Street feels the chill
Analysts attribute the market weakness to a significant slump in IT, banking, and financial stocks, all of which are encountering selling pressure. This trend is not exclusive to Indian markets but is mirrored across stock exchanges in Asia.
Raghavendra Nath, Managing Director at Ladderup Wealth Management, noted that domestic markets had witnessed a "one-sided rally" in the past two months, having already factored in various positive factors. Nath suggested that there might be selling pressure at record high levels, indicating a correction in the wake of the recent rally.
The market downturn comes on the heels of an exceptional 2023, during which the Sensex and Nifty gained nearly 20 percent, with the majority of the gains concentrated in the final two months. The start of 2024 has seen a more cautious approach, with expectations of a correction looming.
Investors are also adopting a cautious stance ahead of key economic data releases from the US and Asia scheduled for the week. This data is anticipated to provide insights into the outlook for interest rates. Focus will particularly be on US jobs data and nonfarm payrolls, along with the release of minutes from the US Federal Reserve's recent policy meeting.
On the domestic front, market participants are closely monitoring the upcoming Interim Budget 2024. According to brokerage firm Jefferies, the government is likely to concentrate on augmenting budgets for social welfare programs in preparation for the crucial Lok Sabha elections later this year.
Published By:
Koustav Das
Published On:
Jan 2, 2024
English (US) ·