Indian equity market benchmark indices Sensex and Nifty experienced a sharp decline in early trade on Monday, mirroring the extremely weak trends in global markets. This downturn was driven by a confluence of factors, primarily fears of a slowdown in the US economy and significant foreign fund outflows.
The 30-share BSE Sensex plummeted by 2,401.49 points, settling at 78,580.46 in early trading. The NSE Nifty followed suit, tumbling by 489.65 points to reach 24,228.05. Among the Sensex constituents, Tata Motors, Tata Steel, JSW Steel, Adani Ports, Maruti, and Reliance Industries bore the brunt of the sell-off, emerging as the biggest laggards. In contrast, Sun Pharma and Hindustan Unilever bucked the trend, trading in the positive territory.
Across the Asian markets, Seoul, Tokyo, and Hong Kong were trading significantly lower, while Shanghai bucked the trend with a higher quote. The US markets ended Friday’s session with substantial losses.
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, attributed the global stock market rally to consensus expectations of a soft landing for the US economy. However, he highlighted that this expectation is now under threat in light of the decline in US job creation in July and the sharp rise in the US unemployment rate to 4.3 percent. He also underscored that geopolitical tensions in the Middle East are contributing to the market anxieties.
Adding fuel to the fire, Foreign Institutional Investors (FIIs) offloaded equities worth Rs 3,310 crore on Friday, according to exchange data.
Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd, commented that anxiety remains high, particularly after Friday’s unexpectedly weak US July jobs report. This suggests that volatility will be a defining characteristic of the market for the day.
Global oil benchmark Brent crude climbed 0.35 per cent to USD 77.08 a barrel.
Amid widespread selling pressure, the BSE benchmark plummeted 885.60 points or 1.08 per cent to close at 80,981.95 on Friday. The broader Nifty of NSE dropped 293.20 points or 1.17 per cent to end at 24,717.70. (Except for the headline, this story has not been edited by DNA staff and is published from PTI) The DNA app is now available for download on the Google Play Store. Please download the app and share your feedback with us.
