The domestic equity market witnessed a catastrophic fall on Tuesday, January 23, when the BSE Sensex fell by over 1,000 points and the NSE Nifty fell by over 330 points.
On Tuesday, the Sensex fell 1,053.10 points to close at 70,370.55, while the Nifty fell 330.15 points to 21,241.65. Shares of 25 out of 30 Sensex companies saw a decline.
Top fallers included IndusInd Bank, State Bank of India, Hindustan Unilever, HDFC Bank and Bajaj Finance, falling up to 5.97 per cent. There were also six gainers – Sun Pharma, Bharti Airtel, ICICI Bank, Power Grid, Bajaj Finserv and TCS – rising between 4 per cent and 0.03 per cent.
Why did the Sensex fall today?
Vinod Nair, Head (Research), Geojit Financial Services, said, “The market witnessed a sustained downtrend today, despite a positive start it suddenly turned negative, mainly due to heavy selling in veteran sectors, especially finance. Mid- and small-caps saw greater losses than the main indices.
He said selling by FIIs due to reasons such as the recent increase in tensions in the Middle East and the Red Sea as well as high valuations and mixed results of the earnings season so far prompted investors to book profits from the recent rally. “Going forward, the market is likely to see stock-specific activity during the ongoing earnings season.”
Prashant Tapase, Senior Vice President (Research), Mehta Equities, said, “Despite the positive momentum in the global market, selling pressure continued in the domestic markets today, mainly due to the news which is worrying the FIIs as SEBI has last… A draft has been prepared to tighten the benefits. Ownership norms for foreign investors will come into effect from February 1. This was despite pressure from foreign banks and some offshore fund managers to ease the rules before the deadline.
He said that if this is true, then domestic markets may see additional sales of Rs 1.5 lakh crore to Rs 2 lakh crore in the next six months.
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