Indian stock indices slump amid global market weakness and domestic concerns

Indian primary stock indices witnessed a significant downturn on Wednesday, following the global trend of weakening markets. The Nifty 50 index dropped below the 20,000 mark, primarily driven by sharp declines in heavyweight stocks such as Reliance Industries and HDFC Bank.

By the afternoon trading session, the Sensex had fallen 618.23 points (0.91 percent) to 66,978.61, while the Nifty 50 dropped 177.20 points (0.88 percent) to 19,956.10. The combined decline in RIL and HDFC Bank shares accounted for approximately 140 points of the Nifty 50’s nearly 175-point drop.

The market breadth leaned towards falling stocks, with around 1,755 stocks declining compared to 1,242 gaining, while 100 remained unchanged. Factors such as rising US bond yields, a weaker rupee, increasing crude oil prices, and sales by foreign institutional investors contributed to the challenges faced by Indian markets.

Market participants also exhibited caution ahead of the US Federal Reserve’s rate decision announcement due to its potential implications for global financial markets.

Experts noted that the Nifty has been consolidating within a broad range in recent sessions due to notable call writing activity at higher levels. This indicates that market participants are cautious and are selling call options to hedge against potential downward movements.

Immediate support levels for Nifty and Sensex are seen at 19,900 and 66,900 respectively. If these levels are breached, additional profit booking may occur, potentially leading towards 19,640 for Nifty and 66,000 for Sensex.

HDFC Bank was under scrutiny as it fell nearly 4 percent due to concerns over potential margin pressure and asset quality following its major merger. These concerns led to downward revisions in price targets by several brokerages.

The Nifty Bank index also fell by a percent, pulled down by the sharp drop in HDFC Bank and losses in Kotak Mahindra Bank, ICICI Bank, and Federal Bank.

Reliance Industries dropped around 3 percent due to a block deal involving 1.9 crore shares of RIL or 0.3 percent equity on the exchanges, worth around Rs 4,563 crore.

Other major sectors such as automobile, information technology, metals, pharma, FMCG, and infrastructure also faced losses. In the broader market, smallcap stocks experienced intense pressure with the Nifty Smallcap 100 falling around a percent. The Nifty Midcap 100 decreased marginally by 0.2 percent.

However, shares of Blue Star hit a 52-week high after the company announced a qualified institutional placement to reduce some of its debt and fund growth opportunities. Similarly, order wins for NBCC, BL Kashyap and Sons, and Ashoka Buildcon led to a surge in their stock prices.