6 days ago
Sensex Falls 539 Points as HDFC Bank, Geopolitics Weigh
Indian stock markets fell for the second day in a row on Thursday.
The Sensex lost about 539 points, while the Nifty lost nearly 117 points.
The Nifty finished below 24,100.
HDFC Bank was one of the biggest losers after reports of a US class-action lawsuit.
Reliance Industries and several other large companies also declined.
Trading was choppy because monthly derivatives contracts were expiring.
Investors remained worried because there was no diplomatic breakthrough in the Middle East.
Oil prices rose slightly, and foreign investors had bought Indian shares on Wednesday.
The BSE Sensex fell 539.35 points, or 0.70%, to 76,933.59 on Thursday.
The NSE Nifty declined 116.90 points, or 0.48%, to 24,090.85, ending below 24,100.
HDFC Bank, Reliance Industries, NTPC, Mahindra & Mahindra, Bharti Airtel, HCL Tech and ITC were among the major laggards.
Kotak Mahindra Bank, ICICI Bank, Tech Mahindra and Bharat Electronics were among the gainers.
Monthly derivatives-expiry volatility and Middle East uncertainty pressured sentiment, while Brent crude rose 0.67% to USD 88.43 per barrel.
- Who
- Indian stock-market investors and companies listed on the BSE and NSE were involved.
- What
- The Sensex and Nifty fell sharply for a second consecutive day, ending at their session lows.
- Where
- India's BSE and NSE markets, amid mixed global market conditions.
- When
- Thursday, August 27, on the monthly derivatives-expiry day.
- Why
- Selling in HDFC Bank and other blue-chip shares, expiry-related volatility and continuing Middle East uncertainty weighed on sentiment.
Domestic Pressure View
External and Technical Factors View
Main cause of the decline
Domestic Pressure View
Selling in HDFC Bank, Reliance Industries and other heavyweight shares was identified as a major drag on the indexes.
External and Technical Factors View
Analysts also attributed the weakness to monthly expiry-related volatility and persistent geopolitical uncertainty.
Oil-market influence
Domestic Pressure View
Rising crude prices later in the session added to pressure on investor sentiment, according to Bajaj Broking Research.
External and Technical Factors View
Another market view cited softer crude prices and easing concerns over the Strait of Hormuz as supportive factors that were outweighed by domestic selling.
Market outlook
Domestic Pressure View
The lack of a diplomatic breakthrough in the Middle East was expected to keep markets range-bound in the near term.
External and Technical Factors View
Cautious positioning ahead of Fed Chair Kevin Warsh's Jackson Hole speech was also cited as limiting a meaningful recovery.
Key facts
- Sensex close
- 76,933.59, down 539.35 points or 0.70%
- Nifty close
- 24,090.85, down 116.90 points or 0.48%
- Market trend
- Both benchmark indexes declined for the second consecutive day
- HDFC Bank
- Fell 2.08% to Rs 712 on the BSE; reports also cited a US class-action lawsuit
- Trading condition
- Both indexes settled at the day's low on the monthly derivatives-expiry day
- Brent crude
- Rose 0.67% to USD 88.43 per barrel
- Foreign institutional investors
- Bought equities worth Rs 502.63 crore on Wednesday
Quotes
Vinod Nair
Head of Research at Geojit Investments Ltd
“Indian equity markets ended lower on Thursday as domestic headwinds outweighed supportive global cues, with broad-based selling across key sectors offsetting the relief from softer crude oil prices and easing concerns over the Strait of Hormuz”
theprint.in
“HDFC Bank emerged as one of the key drags following news of a US class-action lawsuit, while cautious investor positioning ahead of Fed Chair Kevin Warsh’s Jackson Hole speech kept the benchmark confined to a narrow range”
theprint.in
Sources
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