On Friday, benchmark stock market indices experienced a significant downturn, reversing the gains they initially made during the trading session.
The S&P BSE Sensex plummeted by 732.96 points to close at 73,878.15, while the NSE Nifty50 dropped by 172.35 points to settle at 22,475.85. Volatility surged notably across the broader market indices throughout the trading session.
At one juncture, the Sensex saw a nearly 1,200-point decline, accompanied by a downturn of over 250 points for the Nifty.
Most Nifty sectoral indices witnessed substantial declines, with Nifty Realty, Nifty Oil & Gas, and Nifty IT experiencing the most significant downturns.
Among the top five gainers on the Nifty50 were Coal India, Grasim, ONGC, Apollo Hospitals, and Hindalco. Conversely, L&T, Maruti Suzuki, Nestle India, Reliance Industries, and Bharti Airtel emerged as the top losers.
Market analysts attribute today's decline on Dalal Street primarily to heightened volatility.
Amit Goel, Co-Founder and Chief Global Strategist at Pace 360, noted the recent surge in market volatility, citing a combination of global and domestic factors. Globally, speculation surrounding the timing and magnitude of the season's first Fed rate cut, coupled with selling pressure from FIIs in emerging markets, played a significant role. Domestically, factors such as Q4 results announcements, pre-election result jitters, and high levels of margin trading have contributed to the heightened market fluctuations.
Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd, highlighted the possibility of geopolitical tensions resurfacing, providing traders with opportunities to adopt short positions in the market. While Q4 earnings were assessed as neutral to positive and not overly impressive, reports indicated that FIIs had reduced their holdings in large-cap stocks like HDFC Bank and ITC. Tapse advised traders to remain cautious and focus on fresh geopolitical developments in the short term.
