Market Update: Nifty 50 Closes Below 19,750, Sensex Drops 550+ Points, Investors Lose ₹3 Trillion.

You are currently viewing Market Update: Nifty 50 Closes Below 19,750, Sensex Drops 550+ Points, Investors Lose ₹3 Trillion.
image by Nishant Kumar (livemint.com)

In the ever-fluctuating world of finance, the closing bell often marks the culmination of a day filled with anticipation, optimism, and sometimes, disappointment. On September 21, 2023, the Indian stock market witnessed a tumultuous day as the Nifty 50 index closed with a loss of 159 points, or 0.80 per cent, settling at 19,742.35. Simultaneously, the Sensex ended its day at 66,230.24, down 571 points, or 0.85 per cent. This downward spiral resulted in investors collectively losing nearly ₹3 lakh crore.

The Rollercoaster Ride

A Rocky Start

The day commenced with Nifty 50 opening at 19,840.55, slightly below the previous close of 19,901.40. However, within hours, it took a nosedive, hitting an intraday low of 19,709.95. The Sensex mirrored this trend, declining by 672 points and reaching an intraday low of 66,128.71.

Top Gainers and Losers

Among the Nifty 50 stocks, 34 ended in the red, leaving only 16 in the green. Mahindra and Mahindra took the lead among the losers, closing with a 2.88 per cent loss. It was followed by ICICI Bank (down 2.81 per cent) and Cipla (down 2.47 per cent). On the flip side, Adani Ports (up 1.74 per cent), Tech Mahindra (up 1.43 per cent), and Dr. Reddy’s Laboratories (up 1.10 per cent) emerged as the top gainers.

Sectoral Indices in Distress

The downturn was not limited to the overall market indices alone. Virtually all sectoral indices concluded the day in negative territory, with Nifty PSU Bank experiencing the most significant decline at 2.28 percent. Other sectors that observed substantial drops included Nifty Auto (1.69 percent decrease), Nifty Bank (1.68 percent decline), Nifty Private Bank (1.53 percent fall), Nifty Financial Services (1.44 percent drop), Nifty Realty (1.21 percent decrease), and Nifty Pharma (0.99 percent decline).

The Global Influence

The tumultuous day in the Indian market was not an isolated event but rather a reflection of global economic trends. Major European markets, including France’s CAC, Germany’s DAX, and the UK’s FTSE, fell by up to a per cent ahead of the Bank of England’s interest rate decision.

The previous night, the US Federal Reserve decided to maintain its interest rates but hinted at a rate hike by year-end. Additionally, it suggested that rates would remain elevated for an extended period, which sent shockwaves through the markets. As a result, the US dollar and Treasury yields rose, exerting pressure on global stock markets. The dollar even reached its highest point since March, causing further unease among investors.

Expert Opinions

Financial analysts have shared their perspectives on the situation, providing insights into the challenges facing the market. Vinod Nair, who serves as the Head of Research at Geojit Financial Services, pointed out, ‘The domestic market experienced a decline in response to a more hawkish stance by the Federal Reserve chair and the expectation of sustained high-interest rates, which is unfavorable for a global economy that is slowing down. Public sector banks and mid and small-cap stocks were particularly affected due to stretched valuations and concerns about yield moderation. Additionally, the rising oil prices and unpredictable rainfall further prompted investors to exercise caution in the market.

Shrikant Chouhan, Head of Retail Research at Kotak Securities Ltd., expressed a similar view, saying, ‘The bearish sentiment in global equities has prompted selling in the domestic market for the third consecutive session. Investors are concerned about the US Fed’s statement indicating the possibility of another rate hike later this year, along with other negative factors such as persistent foreign fund outflows, an increasing US Dollar index, rising treasury yields, and elevated crude oil prices, all contributing to investor unease.

Technical Analysis

Technical analysts have also chimed in on the market’s movements. Shrikant Chouhan pointed out that the Nifty has completed one leg of correction and that 19,700 would be a critical level to watch. If the index manages to trade above this level, a relief rally could be expected.

Jatin Gedia, Technical Research Analyst at Sharekhan by BNP Paribas, highlighted that the Nifty is retracing the rise it saw from 19,223 to 20,222. It has now reached the support zone of 19,720 – 19,680, where the 20-day moving average and the 50 per cent Fibonacci retracement level are situated. Gedia anticipates that the Nifty will maintain this support level and trigger a rebound.

Source: Click here

The day’s events in the Indian stock market, with the Nifty 50 ending below 19,750 and the Sensex falling over 550 points, have left investors grappling with uncertainty. The global economic landscape, coupled with domestic factors, has contributed to this tumultuous ride. However, market experts suggest that vigilance and strategic decision-making will be essential for navigating these choppy waters.


FAQs

1. Why did the Indian stock market experience a sharp decline on September 21, 2023?

The Indian stock market witnessed a sharp decline on this day due to a combination of factors, including a hawkish stance by the US Federal Reserve, rising US Treasury yields, and concerns about the global economic slowdown.

2. Which sectors were the worst affected during this market downturn?

The worst-affected sectors included PSU banks, mid and small-caps, Nifty Auto, Nifty Bank, Nifty Private Bank, Nifty Financial Services, Nifty Realty, and Nifty Pharma.

3. What were the key levels to watch in the Nifty index during this market turbulence?

Experts highlighted 19,700 as a critical level to watch in the Nifty index. If the index trades above this level, a relief rally could be expected.

4. How did global markets influence the Indian market’s performance on this day?

Major European markets and the US Federal Reserve’s decisions had a significant impact on the Indian market. Weakness in European markets and the Fed’s hints at a rate hike and elevated rates affected investor sentiment globally.

5. What should investors do in response to this market volatility?

Experts recommend vigilance, strategic decision-making, and diversification of portfolios to navigate the volatile market conditions effectively. It is crucial to remain well-informed and seek expert guidance when necessary.

Leave a Reply