Why did Sensex, Nifty fall today after 9 consecutive days of rally? Explained

At the time of writing this news, the Sensex was trading at 59,854.91, down 576.09 points or 0.95%. But the 30-issue benchmark declined overall by 988.53 points to hit a low of 59,442.47 for the day.

The Nifty 50 was trading at 17,682.05, down 145.95 points or 0.82%. The benchmark is down at least 254 points after touching a low of 17,574.05.

Broadly, markets saw buying, however, a frenzied sell-off was witnessed it stock Profit is gone. Midcap and Smallcap indices on BSE also saw a marginal rise. Whereas, except for Healthcare, Capital Goods and IT stocks, positive sentiment was seen in rest of the sectoral indices.

The BSE IT index traded at 26,830.37, down 1,404.83 points or 4.98%. During the day, the index fell nearly 1921 points with a low of 26,314.34.

On Sensex, top losers were – Infosys Tech Mahindra declined nearly 10% after 5% and HCL Tech declined 3%. Stocks like L&T, HDFC, NTPC, Wipro, HDFC Bank and more TCS fell between 1% and 2%.

Among the top Sensex gainers – Nestle India gained 4.4%, followed by Power Grid 2.4%, SBI up 1.9% each, while Kotak Bank and IndusInd Bank gained 1.6% each. ITC also increased by more than 1%.

Although HDFC bank While it was in the red after the fourth quarter results, however, buying in SBI, IndusInd and Kotak lifted the overall Bankex and Bank Nifty as both the indices were marginally up.

From March 29 to April 13, the markets were on a winning spree. During these 9 days, the Sensex climbed over 2,817 points or 4.9%. While the Nifty 50 jumped over 876 points or 5.2%.

Sonam Srivastava, founder of investment advisory firm Wright Research, explaining the reasons for the fall in the market today, said, “Today the market is down due to disappointing fourth quarter results of top IT companies, TCS and Infosys, which have been missed by the market. estimates amid global uncertainties. This has set a subdued tone for the Q4 performance of the IT sector. Experts predict that the next 1-2 quarters will be volatile for the industry but recovery is expected afterwards.”

According to Srivastava, management commentary from India’s top two IT services companies warned about customer sentiment in BFSI, technology services and other verticals, especially in the US. Factors such as unplanned project ramp-downs, delays in customer decision-making and customers postponing non-critical initiatives have contributed to the weak performance.

Furthermore, he highlighted that industry experts view Q1FY24 cautiously and expect growth in Q2FY24. The uncertainty in the US market may ease in the April-June quarter. Still, it may take 1-2 quarters for new work to materialize, indicating that October-November may be a better time for the industry.

“While earnings softness may continue for a few quarters, growth is expected to return as the US economy remains strong post-Covid, and customers sign up for larger contracts to further reduce costs. However The slowdown in the BFSI segment, which is high on the digital maturity curve, could slow down growth for IT over the next three to four quarters,” Srivastava said.

Further, Divam Sharma, Founder, Green Portfolio PMS said, “IT sector markets remained under pressure today due to negative comments coming in on outlook from major developed markets including US.”

Sharma said, “With high probability of slowdown in US, UK and many European countries, we see continuing uncertainty around the order outlook for the next 1-2 quarters. However, some good value opportunities in this sector are slowly opening up. emerging.” Infosys is now trading at a PE multiple of 21.2x, anything less than 19x is a great opportunity to invest in the stock.”

Meanwhile, according to Mitul Shah – Head of Research at Reliance Securities, the 4QFY23 earnings season will pick up pace in the coming weeks. Meanwhile, US, Europe and Chinese economic data are giving mixed signals. Inflation, though declining, remains high in the US and Europe. Early signs of a slowdown are emerging from US jobs data and commentary from TCS and Infosys managements. China’s recovery is still lower than expected.

In India, Shah said, “Inflation has eased, while growth is picking up speed due to a pick-up in government capital expenditure and PLI investments. Services exports are offsetting the slowdown in merchandise exports and India’s foreign exchange Stockpiles are building up. In the coming weeks, investors should analyze March quarter earnings results and closely follow management commentary for further signals. Brent crude remains firm at $86.5/barrel.

Disclaimer: The views and recommendations given above are of individual analysts or broking companies and not of Mint. We advise investors to do due diligence with certified experts before making any investment decision.