Sensex and Nifty experience significant decline, Investors lose Rs 5.78 Lakh Crore

New Delhi: In a notable turn of events, benchmark stock market indices, the S&P BSE Sensex and the NSE Nifty 50, witnessed a substantial decline on Thursday, marking the longest losing streak for these indices in eight months.

The S&P BSE Sensex witnessed a sharp drop of 811.19 points, closing at 63,237.87, while the NSE Nifty 50 fell below the 18,900 mark, shedding over 246 points. This decline is attributed to several factors, including global market weaknesses, concerns about rising US Treasury yields, escalating geopolitical tensions, and the monthly F&O expiry.

Notably, the broader domestic market indices, including Nifty Midcap 100 and Smallcap 100, also saw declines of over 2 percent. The surge in India VIX, a measure of market volatility, by 10 percent, reflects the tense atmosphere prevailing on Dalal Street.

Several sectoral indices, including Nifty Bank, Nifty Financial Services, and Nifty IT, experienced substantial losses, falling between 1.3 percent and 1.7 percent. The Nifty Media and Nifty Realty sectors were hit the hardest, with both indices declining over 2.4 percent.

The market’s concerns were particularly focused on IT stocks due to fears of potential interest rate hikes driven by rising US Treasury yields. Disappointing Q2 results from major IT firms further contributed to the subdued market sentiment. For instance, Tech Mahindra reported its most significant drop in net profit in over 16 years, leading to concerns about the company’s future growth prospects.

Also Read: Sensex Falls Over 500 Points, Nifty Slips Below 19000

Another contributing factor to the downturn was the decline in Adani Group stocks, with all 10 listed companies within the conglomerate experiencing declines. This followed a report suggesting that India’s accounting regulator, the National Financial Reporting Authority (NFRA), was scrutinizing one of the group’s auditors.

The Nifty Financial Services index also saw a sharp downturn, primarily due to the decline of financial heavyweights Bajaj Finance and Bajaj Finserv, both of which fell by nearly 3 percent.

Global stock markets, led by the US, also witnessed a decline, which had a cascading effect on Indian market sentiments. With the 10-year bond yield in the US approaching 5 percent, foreign investors are likely engaging in selling activities. Additionally, the ongoing Israel-Hamas war raised concerns about potential global growth derailment and its impact on high oil-importing nations like India.