Indian equity markets traded in the red for the second straight session dragged by losses in the banking and IT stocks tracking negative cues from Asian peers. The S&P BSE Sensex which registered a fresh all-time high of 72,562 on Monday, January 01, hit low of 71,614 on Tuesday. The BSE benchmark was down over 650 points at the lowest point of the day today. Meanwhile, the NSE Nifty 50 fell to a low of 21,556 – down nearly 200 points in intra-day trades.
Among the frontline stocks, UltraTech Cement with a loss of over 3 per cent was the top loser among in the Sensex 30. Mahindra & Mahindra, Wipro, Larsen & Toubro, Tech Mahindra, NTPC, ICICI Bank, JSW Steel, Tata Steel and Infosys were the other major losers.
Dhanlaxmi Bank rose over 6% after its gross advance came in at Rs 10,350 crore for the quarter ended December, up 11% year-on-year.
Sector-wise, Nifty IT declined 0.44%, and Nifty Auto fell 0.2%. Nifty Bank, Financial Services, Metal, and Consumer Durables also opened lower, while Nifty Media, Pharma, Realty, and Healthcare opened higher. Meanwhile, in the broader market, Nifty Midcap100 rose 0.1%, and Nifty Smallcap100 gained 0.4%.
According to experts the sharp rise in India VIX or volatility index to multi-month highs in the recent past is seen as a precursor to rise in volatility going ahead. Further, the rollovers of January Nifty futures at a significant premium also signaled overheating in the market as traders paid higher premiums to roll over their long positions.
Here Are the Key Reasons Why the Market Is Falling Today
Profit-taking
The Sensex and Nifty have rallied over 13 per cent in the last two months driven by hopes of a likely reversal in interest rate cycle. Given the sharp gains, investors seem to be taking home some profit ahead of the Q3 earnings season, which starts next week.
Global cues
Asian markets exhibited a mixed trend today, with Hang Seng down 1.5 per cent. China’s benchmark indices were down up to 1 per cent, as China’s official manufacturing PMI data shows deepening contraction in December.
FII/DII tracker
Foreign institutional investors (FIIs) sold Indian shares worth Rs 856 crore, on a net basis, on Monday. Domestic institutional investors (DIIs) bought a net Rs 410 crore worth of stocks, exchange data showed.
Rupee decline
The Indian rupee fell 9 paise to $83.30 against the US dollar in early trade amid losses in Asian peers and expectations of subdued portfolio flows. The dollar index, which tracks the movement of the greenback against a basket of six major world currencies, rose 0.2% to 1021.53 level.
Oil rises
Oil prices jumped over 1% on Tuesday, starting the New Year higher as a Red Sea naval clash focused attention on potential Middle East supply disruptions and expectations of Chinese economic stimulus boosted the demand outlook in the world’s top crude importer.
Brent crude rose $1.26, or 1.64%, to $78.30 a barrel, while US West Texas Intermediate crude was at $72.70 a barrel, up $1.05, or 1.47%.
Key levels for Nifty 50, Sensex and Bank Nifty today
On major levels to look at, Sumeet Bagadia, Executive Director at Choice Broking said, “Nifty 50 index is facing resistance at 21,800 to 22,000 range whereas it has crucial support placed at 21,200 levels. Sensex today is in 70,000 to 72,500 range while Bank Nifty today is in 46,900 to 48,500 range.”
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