Sensex, Nifty tumble again: What's dragging stock market down?

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Sensex fell over 750 points to a level of 71,900
May 13, 2024

12:33 pm

What’s the story

The Indian benchmark equity indices, BSE Sensex and Nifty 50, experienced significant losses on Monday.

The Sensex fell over 750 points to a level of 71,900 while the Nifty dipped below 21,850 by falling down by 210 points.

This downturn was primarily driven by auto and IT stocks ahead of the release of domestic inflation data.

The ongoing fourth phase of the Lok Sabha elections further exacerbated market volatility causing India VIX to surge by 14%.

Market performance

Top losers and gainers in early trading

In early trading, Tata Motors, Tata Steel, JSW Steel, Maruti, NTPC, Reliance Industries, and Power Grid were among the top Sensex laggards.

Conversely, Sun Pharma, HUL and Kotak Bank emerged as the only gainers at the opening bell.

Tata Motors shares fell 9% due to anticipated weakening local demand for passenger vehicles in H1 FY2025.

Meanwhile, JK Cement saw a rise of 6% after posting a 101% YoY increase in its net profit to ₹219.75 crore in Q4 of FY24.

Market outlook

Sectoral performance and market predictions

On a sectoral level, Nifty Auto declined by 2.5%, dragged down by Tata Motors, TVS Motor, and Samvardhana Motherson.

Nifty PSU Bank also plunged by 2.1%, affected by Bank of India, Union Bank of India, and PSB.

V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services commented on the aggressive FPI selling in May stating that “the FPI selling is due to a change in FPI stance from ‘sell China, buy India’ earlier to ‘sell India, buy China’ now.”

Global impact

Global market fluctuations and commodity prices

Foreign investors net sold Indian shares worth ₹2,118 crore on Friday, while domestic institutional investors net bought ₹2,710 crore in stocks.

FPIs have been sellers in 23 of the last 28 sessions. The global market also saw some fluctuations with Chinese blue chips reaching a seven-month high due to improved sentiment, while Japan‘s Nikkei eased by 0.2%.

In terms of commodities, oil prices extended declines on Monday amid signs of weak fuel demand and dampened hopes of US rate cuts.