News

Published: May 18, 2023
Updated: May 18, 2023

Indian Stock Indices Decline for Second Consecutive Day as Global Market Concerns Persist

The benchmark stock indices, Sensex and Nifty, experienced a decline for the second day in a row on Wednesday, primarily driven by intense selling in IT, banking, and tech stocks. This downward trend in the Indian market was influenced by a mixed trend in global equities, leading to cautiousness among domestic investors. Weak global sentiments, particularly concerns about a potential recession and economic slowdown, contributed to the negative market sentiment.

Sensex and Nifty Performance:

The 30-share BSE Sensex started the day flat but eventually declined by 371.83 points or 0.60%, closing at 61,560.64. It also experienced a significant tumble of 592.37 points or 0.95% during the day, reaching a low of 61,340.10. Similarly, the NSE Nifty declined by 104.75 points or 0.57%, settling at 18,181.75.

Factors Affecting Market Sentiment:

Vinod Nair, Head of Research at Geojit Financial Services, highlighted that weak global sentiments, particularly in the US market, played a role in the cautiousness of domestic investors. Recent economic data indicating a slowdown and a decrease in demand, coupled with ongoing debt ceiling negotiations, contributed to the subdued market sentiment.

Performance of Sensex Companies:

Several major companies in the Sensex reported declines, including Kotak Mahindra Bank, Asian Paints, Tata Consultancy Services, HCL Technologies, Infosys, Tata Steel, Wipro, Bajaj Finance, Tata Motors, Titan, and Bajaj Finserv. Conversely, IndusInd Bank, ITC, Bharti Airtel, Maruti, UltraTech Cement, Mahindra & Mahindra, and State Bank of India were among the gainers.

Investor Concerns and Market Outlook:

Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities Ltd., noted that cautious investors continued to book profits amidst concerns of a slowing economy and the possibility of a recession. Subdued economic readings from the US and China further contributed to investor jitters about the future.

Market Performance by Sector:

In the broader market, the BSE smallcap gauge witnessed a slight increase of 0.25%, while the midcap index dipped by 0.16%. Specific sectors experienced declines, including realty (1.29%), tech (0.89%), utilities (0.82%), IT (0.79%), oil & gas (0.60%), and telecommunication (0.57%). On the other hand, FMCG, industrials, auto, and services sectors showed positive gains.

Global Market Overview:

Asian markets in Seoul and Tokyo ended in the green, while Shanghai and Hong Kong settled lower. European markets were trading with a mixed trend, and the US market ended lower on Tuesday.

Foreign Institutional Investors (FIIs):

Foreign Institutional Investors (FIIs) turned out to be buyers on Tuesday, purchasing equities worth ₹1,406.86 crore, according to exchange data.

Crude Oil Prices:

The global oil benchmark, Brent crude, experienced a slight dip of 0.12% and settled at $74.82 per barrel.

The consecutive decline in the Sensex and Nifty, influenced by intense selling in IT, banking, and tech stocks, reflects the cautiousness among domestic investors due to weak global sentiments.Concerns about a potential recession and economic slowdown, coupled with subdued economic readings from the US and China, contributed to the negative market sentiment. However, gains in certain sectors and the presence of foreign institutional buyers indicate a mixed outlook for the market.