The stock market took a sharp dive as the trading session opened on Friday, with significant losses across major sectors, including mid and small-cap IT, telecom stocks, as well as metal and auto stocks. This sudden decline is a sharp reminder of the volatile nature of the markets, which continue to face headwinds from global and domestic factors.
Early Morning Plunge:
By 9:20 am IST, the BSE Sensex plunged by 746.12 points, or 1%, reaching 73,866.31. The NSE Nifty followed suit, dropping 221.15 points or 0.98%, bringing it down to 22,323.90. However, the losses deepened even further by 9:45 am, with the Sensex falling by 972.33 points, or 1.30%, to 73,640.10, and the Nifty dropping by 282.45 points, or 1.25%, to 22,262.60.
Top Underperforming Stocks:
Among the 30 Sensex stocks, IndusInd Bank led the losses with a 4.07% drop, trading at ₹1,003.75. Mahindra & Mahindra also took a hit, falling by 2.86%, trading at ₹2,648.00, followed by NTPC, which dropped 2.61% to ₹307.50.
IndusInd Bank had posted a 1.96% rise during the previous session, making today’s performance a notable contrast.
Sector Performance:
Across the Nifty sectoral indices, Nifty Midsmall IT & Telecom took the largest hit, down 2.52%, reaching 8,890.50. It was followed by Nifty Metal, which fell 2.10% to 8,159.80, and Nifty Auto, which saw a 1.98% decline, reaching 20,913.80.
Interestingly, Nifty Metal had also posted one of the biggest drops during the previous session, underlining its volatility.
Previous Session Overview:
Despite today’s sharp decline, the market had closed flat on Thursday. The Nifty and India VIX both showed a decline for the seventh consecutive day, signaling that investors were not anticipating any major plunges, at least in large-cap stocks.
Akshay Chinchalkar, Head of Research at Axis Securities, noted that the Nifty’s daily ranges have been shrinking since the gap-down experienced earlier in the week, a sign that selling pressure was gradually easing. However, he also highlighted that 22,500 remains a critical support level for the Nifty, and 22,720 would be key for a potential rebound.
Market Sentiment and Key Levels:
The market sentiment remains depressed, with just 10% of NSE500 stocks trading above their 100-day moving averages. Despite some pockets of optimism, the Nifty remains stuck in a range of 22,500-22,800. The immediate support levels are seen at 22,500, followed by 22,370, while the index faces resistance near 22,720.
As for individual stocks, UltraTech Cement saw the largest drop in the previous session, down 4.99%, closing at ₹10,420.65. Other notable losers included Tata Motors and Mahindra & Mahindra, which fell 2.05% and 1.95%, respectively.
On the positive side, Bajaj Finserv led the gains, rising 2.59% to ₹1,924.55, followed by Bajaj Finance, which climbed 2.39% to ₹8,695.50.
Foreign Institutional Investors vs. Domestic Institutional Investors:
Foreign Institutional Investors (FIIs) were net sellers, offloading ₹556.56 crore of equities, while Domestic Institutional Investors (DIIs) remained net buyers, purchasing ₹1,727.11 crore worth of stocks. This dynamic underpins the growing resilience of the domestic market, as DIIs continue to absorb the selling pressure from foreign investors.
Technical Outlook:
On the technical front, Kunal Kamble, Senior Technical Research Analyst at Bonanza, noted that the Nifty is holding just above the critical 22,500 support level. A breach of this could drag the index lower to 22,200 and even 22,000. With 81% of short positions rolled over, the prevailing sentiment remains bearish.
The market is expected to trade within a narrow range of 22,500-22,800 in the short term. Given the negative trend, any rebound is likely to be seen as an opportunity for short-selling.
Conclusion:
The stock market’s dramatic drop today serves as a stark reminder of the volatility in the current environment. The Sensex and Nifty are under pressure, with losses driven by sell-offs in key sectors like IT, telecom, metals, and autos. While the market closed flat yesterday, sentiment remains fragile, and investors will be closely watching support and resistance levels in the coming days to gauge whether a sustained rebound is possible or whether the bearish trend will continue.
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