News Business Market update: Sensex falls by 280 points, Nifty experiences decline

Market update: Sensex falls by 280 points, Nifty experiences decline

The Sensex's fourth consecutive decline, driven by profit booking in response to tax hikes announced in the budget, highlighted the cautious sentiment among investors.

Sensex stock market Image Source : FILEBombay stock exchange building.

Extending its losing streak to the fourth day, the benchmark BSE Sensex declined by 280.16 points on Wednesday, closing at 80,148.88. This drop, amounting to a 0.35% decrease, was driven by profit booking in financial and banking shares following the government's announcement of a hike in securities transaction tax and short-term capital gains tax in the budget for 2024-25.

Market performance

Sensex movement: The 30-share BSE Sensex experienced a significant intraday tumble, plummeting 678.53 points or 0.84% to a low of 79,750.51 before recovering slightly.
NSE Nifty: The broader NSE Nifty also fell, declining by 65.55 points or 0.27% to close at 24,413.50.

Key losers and gainers

  • Top losers: Bajaj Finserv led the pack of losers, dropping 2% after its Q1 earnings failed to meet investor expectations. Other major laggards included Bajaj Finance, Hindustan Unilever, Kotak Mahindra Bank, Adani Ports, Axis Bank, and State Bank of India.
  • Top gainers: On the other hand, Tech Mahindra, ITC, NTPC, Tata Motors, and Sun Pharma were among the gainers. ITC, in particular, surged to 52-week highs, closing 0.42% higher for the second consecutive day, buoyed by the budget proposal of no new tax on tobacco products.

Analyst insights

  • Vinod Nair, Head of Research, Geojit Financial Services: "The budget event has left a mixed bias. The reshuffling of capital gains tax is a short-term negative surprise. Despite this, strong government fiscal and growth policies are attractive to FIIs, which will help stabilise the market. However, a clear recovery will only be evident post the monthly expiry on Thursday."
  • Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd: "Profit-taking in banking and automobile stocks led to a fall in key benchmark indices. Although selective buying support helped markets end off their lows, concerns over higher valuations continue to weigh on investor sentiment."

Market trends and global impact

  • Q1 results: Analysts noted that the ongoing Q1 results, which have been muted so far, will play a crucial role in determining the near-term market trend. "Nifty fell for a fourth consecutive session on Wednesday, logging its worst streak since May 2024," remarked Deepak Jasani, Head of Retail Research, HDFC Securities.
  • Broader market: Despite the overall decline, the BSE smallcap index jumped 1.91% and the midcap index climbed 0.68%.
  • Sector performance: Bankex, financial services, and auto were the laggards, while energy, healthcare, industrials, utilities, telecommunication, and power saw gains.
  • Global markets: In Asian markets, Seoul, Tokyo, Shanghai, and Hong Kong settled lower. European markets were also trading lower, and the US markets ended marginally down on Tuesday.

Foreign investment and oil prices

  • FIIs activity: Foreign Institutional Investors (FIIs) offloaded equities worth Rs 2,975.31 crore on Tuesday, as per exchange data.
  • Oil prices: Global oil benchmark Brent crude jumped 0.75% to USD 81.62 a barrel.

Also read | Budget 2024 | Old or new tax regime: Which will be more beneficial for you? Know here

 

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