Sensex, Nifty close in red despite IT boost; global factors weigh heavy

Benchmark stock market indices erased early gains to end in red on Monday as financials dragged the uptick provided by a surge in IT stocks.

The S&P BSE Sensex lost 638.45 points to end at 81,050, while the NSE Nifty50 was down 218.85 points to close at 24,795.75. Vinod Nair, Head of Research, Geojit Financial Services said that the Indian markets have entered a consolidation phase with high risk of underperforming to Asian peers.

In today’s Nifty 50 trading, there was a clear split between gainers and losers among the top performers. Leading the gainers was Trent Limited, which saw a notable increase of 1.86%. Mahindra & Mahindra (M&M) followed with a rise of 1.48%, while Bharti Airtel gained 1.32%. ITC also performed well, climbing 1.28%, and Bajaj Finance rounded out the top gainers with a 0.67% increase.

On the flip side, several stocks faced significant declines. Adani Ports and Special Economic Zone experienced the steepest drop, falling by 4.29%. Bharat Electronics Limited (BEL) was also hit hard, declining by 3.54%. Adani Enterprises saw a decrease of 3.20%, while Coal India fell by 3.16%. NTPC completed the list of top losers with a drop of 3.10%.

The Nifty Midcap100 index experienced a substantial decline of 2.01%, while the Nifty Smallcap100 index faced an even steeper setback, dropping by 2.75%, suggesting that smaller companies are grappling with more severe market challenges.

The India VIX, commonly known as the fear index, surged by 6.74%, suggesting increased volatility.

“This phase is marked by significant corrections in the broader market due to premium valuations. There is notable global arbitrage activity, with Chinese markets attracting substantial inflows driven by its attractive valuations and stimulus measures. Investors are reassessing their portfolio positions and FIIs outflows are exacerbated. Amid escalating geopolitical tensions, the surging oil prices poses a further challenge to the domestic economy, in the short-term,” he said.

Only one sector managed to stay in positive territory. The IT sector stood out as the lone gainer, with Nifty IT rising by 0.66%.

On the losing side, Nifty PSU Bank faced the steepest decline, plummeting 3.31%. Nifty Media also experienced a significant drop of 3.65%. The financial services sector saw considerable pressure, with Nifty Financial Services declining by 1.70%, Nifty Financial Services 25/50 decreasing by 1.67%, Nifty Private Bank falling 1.82%, and Nifty Bank retreating by 1.91%.

Other sectors also faced substantial losses. Nifty Metal dropped by 2.24%, while Nifty Oil & Gas fell 2.27%. Nifty Consumer Durables declined by 1.91%, and Nifty Realty decreased by 1.13%. Nifty FMCG slid 0.55%, Nifty Auto dipped 0.46%, and Nifty Pharma fell by 0.51%. The healthcare sector also struggled, with Nifty Healthcare Index down 0.50% and Nifty Midsmall Healthcare declining 1.07%.