Sensex and Nifty 50 Drop 1% Each in Broad Sell-off; Investors Shed Over ₹2 Lakh Crore in Single Day

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Sensex and Nifty 50 Drop 1% Each in Broad Sell-off; Investors Shed Over ₹2 Lakh Crore in Single Day

Team FS

12/Apr/2024

Key Points:

Market Downturn: The Indian stock market experiences a significant selloff on April 12, driven by concerns over a rise in the US dollar and long-term bond yields, alongside fading expectations of a US rate cut.
Geopolitical Tensions: Heightened tensions between Israel and Iran, coupled with caution ahead of IT major TCS's quarterly earnings, contribute to the market's downward trend.
Investor Impact: Sensex closes 793 points down, Nifty 50 records a loss of 234 points, with major sectoral indices also ending in the red, resulting in a substantial drop in market capitalization.

In a day marked by global economic uncertainties, the Indian stock market encountered a notable selloff on Friday, April 12. The catalysts behind this downturn were multifaceted, encompassing both domestic and international factors.

One of the primary drivers of the market's decline was the significant rise in the US dollar and long-term bond yields. This surge came in the wake of hotter-than-expected US CPI prints for March, which diminished expectations of a rate cut by the US Federal Reserve in June. As a result, investors anticipated a delay in rate cuts and expressed concerns that any future cuts may not be as substantial as initially speculated.

Adding to the market's woes were geopolitical tensions, particularly those between Israel and Iran. Reports of escalating tensions between the two nations fueled apprehensions among investors, contributing to a risk-off sentiment in the market. Additionally, caution prevailed ahead of the quarterly earnings report of IT giant TCS, with expectations of modest growth in revenue and profits.

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The repercussions of these factors were palpable in the market indices, with the Sensex closing 793 points down and the Nifty 50 recording a loss of 234 points. This downturn extended across major sectoral indices, with Nifty Pharma, PSU Bank, Oil & Gas, Media, and FMCG all experiencing declines of over a percent each. The overall market capitalization of BSE-listed firms witnessed a substantial drop, translating to a loss of approximately ₹2.5 lakh crore in a single session.

Amidst this market turbulence, only a handful of stocks managed to buck the trend, with Divi's Labs, Bajaj Auto, Tata Motors, TCS, and Nestle ending in the green in the Nifty 50 index. Conversely, the majority of stocks ended in the red, with Sun Pharma, Maruti, Power Grid, Titan, and ONGC emerging as the top losers.

Looking at expert opinions, Vinod Nair, Head of Research at Geojit Financial Services, highlighted the impact of US inflation surpassing expectations and its subsequent effect on emerging markets. He also noted concerns over escalating Middle East tensions and subdued Q4 earnings projections as factors contributing to market consolidation.

On the technical front, Prashanth Tapse, Senior VP (Research) at Mehta Equities, outlined key support and resistance levels for the Nifty 50, emphasizing the importance of breaching the 22,800 mark for bullish momentum to prevail.

In summary, the Indian stock market's downturn on April 12 reflects the confluence of global economic uncertainties and domestic concerns. As investors navigate through these challenges, attention remains focused on key developments both domestically and internationally, with market participants closely monitoring indicators for potential shifts in sentiment and trajectory.

Also Read : Friday's Winning Stocks and Losing Bets in Indian Trading! Team FS

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Sensex and Nifty 50 Drop 1% Each in Broad Sell-off; Investors Shed Over ₹2 Lakh Crore in Single Day

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