Sensex and Nifty continue to decline due to a weak rupee and a downturn in the IT sector

The S&P BSE Sensex registered a decline of 241.30 points, settling at 77,339.01, while the NSE Nifty50 slid by 78.90 points to close at 23,453.80. The negative performance reflected ongoing volatility in the market as investors remained cautious amidst sector-specific challenges and broader economic concerns.  

Benchmark stock indices extended their losing streak, ending in negative territory for yet another session. The declines were primarily driven by significant weakness in IT, energy, and pharmaceutical sectors, which collectively exerted downward pressure on the overall market. These sectors struggled to maintain momentum amid global headwinds and domestic uncertainties, contributing to a broad-based decline in investor confidence.  

The S&P BSE Sensex experienced a fall of 241.30 points, concluding the day at 77,339.01. Similarly, the NSE Nifty50 recorded a drop of 78.90 points, closing at 23,453.80. These figures underscore the continuing challenges faced by the equity markets, which have been weighed down by a combination of external and internal factors, including sector-specific weaknesses and macroeconomic pressures.  

Vinod Nair, Head of Research at Geojit Financial Services, observed that the market remained in a phase of consolidation, a trend reflecting cautious investor sentiment. He highlighted that slower earnings growth among companies has been a key factor dampening market performance. Additionally, the depreciation of the rupee, influenced by persistent inflationary pressures, has further weighed on sentiment. These combined factors have created an environment of uncertainty, leading to reduced risk appetite among investors.  

“IT stocks reacted negatively today due to a reduced expectation of a FED rate cut in December, which may pose a delay in spending in the BFSI segment. On the other hand, metal stocks gained some ground after China decided to reduce tax rebates on aluminium and copper,” he added.

Metal stocks took center stage in leading the market gains, with Hindalco Industries emerging as the top performer, climbing by an impressive 3.79%. Tata Steel followed closely with a strong gain of 2.33%, reflecting robust investor sentiment in the sector. The auto sector also contributed significantly to the market’s positive trajectory, bolstered by Hero MotoCorp’s notable 2.69% rise, signaling confidence in the segment’s growth prospects. Adding to the overall upward momentum, consumer goods companies delivered solid performances, with Nestle India advancing 1.47% and Hindustan Unilever posting a gain of 1.46%. These sectors collectively underpinned the market’s resilience amid mixed sectoral trends.  

However, not all sectors fared well, with IT and pharmaceutical stocks coming under notable pressure. Technology giant TCS led the losers, registering a steep decline of 3.11%, as market sentiment in the IT sector weakened. The pharmaceutical sector also faced a challenging session, as Dr. Reddy’s Laboratories fell by 2.75%, and Cipla recorded a drop of 2.38%, reflecting broader concerns in healthcare-related stocks. Additionally, Infosys, another heavyweight in the technology sector, slid by 2.65%, while Bharat Petroleum Corporation Limited (BPCL) joined the list of underperformers, slipping 2.62%. These declines highlighted the contrasting fortunes of different sectors in an otherwise mixed trading session.  

“Sector-wise, there was a mixed performance, with metals, FMCG, and auto gaining, while IT and energy sectors remained under pressure. The broader indices also showed mixed results, as the midcap index remained flat while the smallcap index declined by nearly half a percent. Nifty has now fallen below its major support at the 200-day EMA after a brief pause, indicating that the bears are in control. However, oversold conditions in heavyweight stocks across sectors are currently slowing the pace of the decline. We recommend maintaining a cautious outlook on the index and focusing selectively on stock-specific opportunities,” said Ajit Mishra – SVP, Research, Religare Broking Ltd.

10 of the sectoral indices closed in green, with metal stocks gaining the most. 

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