Sensex plunges 1.5 per cent amid global tensions and profit-taking 

The Indian stock market witnessed a sharp sell-off on Monday, with the BSE Sensex plummeting 1,272.07 points or 1.49 per cent to close at 84,299.78, while the Nifty 50 tumbled 368.10 points or 1.41 per cent to 25,810.85. The decline marked the worst day for both indices in nearly two months, driven by escalating geopolitical tensions in West Asia and profit-booking after recent highs.

The market opened on a weak note, with the Sensex starting at 85,208.76, down from its previous close of 85,571.85. Similarly, the Nifty opened lower at 26,061.30, compared to its last close of 26,178.95. The negative trend persisted throughout the trading session, with both indices closing near their day’s lows.

Mandar Bhojane, Technical Research Analyst at Choice Broking, provided a detailed closing market summary: “The Nifty opened 117 points lower and continued to make a series of lower highs and lower lows on the intraday chart. On the daily chart, a strong bearish candle formed, indicating significant selling pressure from higher levels, which dragged the market toward the 25,800 mark. Should the index break below 25,800, a further correction toward 25,500 could be anticipated, where the 20-day EMA also lies. On the upside, 26,000 is expected to act as immediate resistance.”

On the National Stock Exchange (NSE), the top gainers were JSW Steel (2.93 per cent), NTPC (1.37 per cent), Hindalco (1.14 per cent), Britannia (1.06 per cent), and Tata Steel (0.84 per cent). Conversely, the top losers on the NSE were Hero Motocorp (-4.03 per cent), Axis Bank (-3.29 per cent), Trent (-3.20 per cent), Reliance (-3.13 per cent), and BEL (-3.05 per cent).

Shrikant Chouhan, Head of Equity Research at Kotak Securities, commented on the day’s performance: “Today, the benchmark indices witnessed a sharp selloff… Technically, after a weak opening the market consistently faced selling pressure at higher levels. A sharp intraday fall indicates further weakness from the current levels.”

The market breadth was negative, with 2,218 stocks declining against 1,821 advances on the BSE. A total of 4,193 stocks were traded, with 154 remaining unchanged. Notably, 302 stocks hit their 52-week highs, while 58 touched their 52-week lows.

Among the Sensex constituents, JSW Steel emerged as the top gainer, rising 2.82 per cent to close at 1030.00. Other gainers included NTPC (+1.27 per cent), Tata Steel (+1.17 per cent), Asian Paints (+0.22 per cent), and Titan (+0.19 per cent). On the flip side, Reliance Industries was the biggest loser, dropping 3.23 per cent to 2953.80, followed by Axis Bank (-3.12 per cent), M&M (-2.70 per cent), ICICI Bank (-2.58 per cent), and Nestle India (-2.12 per cent).

Sectorally, only the Metal and Media indices posted gains of 1 per cent each, while all other sectors ended in the red. Auto, banking, IT, telecom, pharma, and realty sectors witnessed declines of 1-2 per cent. The BSE Midcap index saw marginal losses, while the Smallcap index ended flat. India VIX surged by 6.90 per cent intraday, settling at 12.7875, suggesting a decrease in market volatility.

Hrishikesh Yedve, AVP Technical and Derivatives Research, Asit C. Mehta Investment Intermediates Ltd. said, “Bank Nifty opened negative and remained under pressure, closing at 52,978. The index formed a bearish candle, followed by a Morubozu, indicating further weakness. Immediate support is seen near 52,720 (21-DEMA), with the next level at 51,890 (50-DEMA). Any bounce toward 53,300–53,350 should be used for profit-booking.”

Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, provided his insights: “A long bear candle was formed on the daily chart with a gap-down opening. Technically, this chart pattern indicates a bearish reversal type candle pattern… We expect Nifty to find support around 25500-25400, and the market is likely to bounce back from the lows.”

The sell-off was attributed to various factors, including mixed global cues and rising geopolitical tensions involving Israel, Lebanon, and Iran. Concerns over potential conflicts in West Asia that could disrupt oil supply added to the market uncertainty.

Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd, offered additional context: “Profit-taking in the Reliance Industries stock and banking counters, coupled with a slump in Japan’s Nikkei index, spooked Indian markets that saw both Sensex and Nifty crash nearly 1.50 per cent each. While valuations are already on the higher side, the focus would now shift to the RBI credit policy announcement next week, and the start of the quarterly earnings season.”

Ameya Ranadive, Sr Technical Analyst at StoxBox, noted: “Mixed economic signals from the US added to the uncertainty, as recent data showed a decline in the Federal Reserve’s preferred inflation gauge, fuelling hopes for a potential easing of monetary policy. However, investors remained cautious ahead of Fed Chair Jerome Powell’s upcoming speech at the National Association for Business Economics Annual Meeting.”

Ajit Mishra, SVP of Research at Religare Broking Ltd, advised: “Traders are advised to adopt a stock-specific strategy and maintain positions on both sides of the market.”

Vikram Kasat, Head – Advisory at PL Capital – Prabhudas Lilladher, provided additional context: “The Indian market reflected bearish sentiment today, with the Nifty 50 plunging 318 points to finish at 25,860.70, while the BSE Sensex dropped 1,017 points to settle at 84,553. This sharp decline was primarily driven by profit-booking after recent highs and heightened geopolitical tensions that have unsettled investor sentiment.”

Deepak Jasani, Head of Retail Research at HDFC Securities, offered his perspective: “Nifty 50 had its worst day in nearly two months on September 30, fuelled by weak Asian markets (led by Japan), rising tensions in the Middle East and fear of funds moving to China based on recent measures taken by its Govt… Nifty fell on Sept 30 with a downgap and formed a long bearish candle. It showed no signs of significant intraday recovery.”

In terms of open interest (OI), the highest call-side OI was at the 26,000 and 26,200 strike prices, while the highest put-side OI was concentrated at the 25,500 strike price, indicating strong support around the 25,600 level for Nifty.

As the market looks ahead, attention will be focused on upcoming economic data releases, including Infrastructure Output, Current Account Balance, Manufacturing PMI, and WPI Inflation. Additionally, the Reserve Bank of India’s policy decisions in the coming weeks could significantly influence market direction. Tapse warned, “The sharp rally in recent weeks was the outcome of the Fed rate cut and hopes that RBI would also follow suit in its policy meeting, and if the central bank keeps the rates steady, it may lead to short-term weakness. Globally, if the Israel-Hezbollah war escalates further, nervousness could fuel panic selling going ahead.”

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