Stock Market Update: Indian Markets Witness Losses

Indian markets experienced losses today as the Sensex plunged 542 points intraday, hitting a low of 72,081 on February 22. This follows a drop of little over 400 points in the benchmark index on February 21. The Nifty50 also slipped below the 22,000-mark, reaching a low of 21,875. Until February 20, the Sensex had climbed 1,500 points in five sessions, while the Nifty had jumped over 500 points.

Analysts polled by Reuters suggest that India’s stock market may surge to new highs by the end of June, gaining nearly 9% in 2024. They also noted that a correction in the next three months was unlikely.

Here are the key reasons contributing to the downfall:

1. Heavyweight Slips: Leading companies across sectors experienced declines on Thursday, including Bharti Airtel (down 2%), Bajaj Finance (1.7%), HDFC Bank (1.5%), HUL (1.46%), State Bank of India (1.4%), Kotak Mahindra Bank (1.3%), and Bajaj Finserv (1%).
2. US Fed Minutes: The US Federal Reserve displayed no urgency to implement rate cuts despite concerns about emerging “upside risks” to inflation during its latest monetary policy meeting. According to Reuters, the Fed expressed uncertainty about how long a restrictive monetary policy stance would need to be maintained. Consequently, yields on Government bonds rose by around 10 basis points to 7.056%.
3. Technical Levels: Wednesday’s selling led to the formation of bearish candles on the daily charts for benchmark indices. This indicates the potential for further weakness from current levels, particularly below 21,950 for the Nifty50 and 72,350 for the Sensex.

The current market sentiment reflects a cautious approach among investors, influenced by both domestic and international factors. As the market navigates through these challenges, investors are advised to monitor developments closely and make informed decisions based on evolving market dynamics.