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The Indian equity benchmark indices experienced a significant downturn on Monday, September 30, 2024, shedding nearly 1.5% due to heavy selling pressure on frontline stocks like Reliance Industries, ICICI Bank, and HDFC Bank. The slump was attributed to a confluence of factors, including rising geopolitical risks in the Middle East, weakness in Japanese markets, and profit-taking following a recent record-breaking rally. Analysts also cited foreign fund outflows as contributing to the negative sentiment.
The BSE Sensex, India's premier stock index, plummeted 1,272.07 points, or 1.49%, to close at 84,299.78. During the trading session, the Sensex had touched a low of 84,257.14, down 1,314.71 points or 1.53%. Similarly, the NSE Nifty, another significant index, tanked 368.10 points or 1.41% to finish at 25,810.85.
Among the 30 companies comprising the Sensex, Reliance Industries and Axis Bank witnessed the most substantial declines, each losing over 3%. ICICI Bank, Nestle, Tech Mahindra, Mahindra & Mahindra, Maruti, Bajaj Finserv, State Bank of India, and Tata Motors also experienced significant losses. On the flip side, JSW Steel, NTPC, Tata Steel, Titan, and Asian Paints bucked the trend and ended the day with gains.
Vinod Nair, Head of Research at Geojit Financial Services, attributed the global market volatility to heightened geopolitical risks in the Middle East, coupled with the prospect of increased interest rates in Japan. Nair explained that these factors could potentially curb cross-border equity investments. Conversely, he highlighted the Chinese market's resurgence driven by a substantial stimulus package and attractive valuations. He also pointed out that India's market was under pressure due to both global factors and premium valuations, while anticipating metals to outperform in the near term.
Asian markets exhibited a mixed performance. Seoul and Tokyo closed with sharp declines, while Shanghai and Hong Kong ended the day with substantial gains. Japan's Nikkei 225 index suffered a significant 5% drop on Monday, while the Shanghai Composite index surged 8% fueled by the announcement of fresh stimulus measures. European markets were trading lower, and US markets had ended on a mixed note on Friday.
Foreign Institutional Investors (FIIs) continued to offload Indian equities, selling shares worth Rs 1,209.10 crore on Friday, according to exchange data. This added to the negative sentiment prevailing in the market. The global oil benchmark, Brent crude, decreased by 0.19% to settle at $71.84 per barrel.
On Friday, the BSE Sensex had closed at 85,571.85, down 264.27 points or 0.31%. However, during the day, the index had reached a new intra-day peak of 85,978.25, climbing 142.13 points or 0.16%. The Nifty also saw a similar pattern, closing at 26,178.95, down 37.10 points or 0.14% after touching an all-time intra-day peak of 26,277.35 during the session.
Source: Sensex, Nifty tumble nearly 1.5% as bank stocks slump on weak Japanese markets