Sensex Drops 700 Points, Nifty Breaks Below 24,100 Amid Volatility; IT and Auto Stocks Lead Decline
The Indian stock market witnessed a sharp reversal today, giving up early morning gains as key indices Sensex and Nifty nosedived around 0.7%. Despite starting on a positive note, buoyed by recent state election results, the markets faltered at critical resistance levels, reflecting a loss of momentum.
Market Performance
At 10:45 AM on November 28, the BSE Sensex tumbled 557 points, or 0.7%, to 79,677, while the Nifty dropped 151 points to trade at 24,124. This slide from the crucial 24,350 resistance zone highlights profit-booking and a cautious outlook among investors.
Market breadth, however, remained positive, with 2,086 stocks advancing, 1,152 declining, and 105 remaining unchanged.
Sectoral Impact
IT and Automobile stocks led the decline:
IT Sector: Infosys and Tech Mahindra lost 2.3% each, while TCS and HCL Tech slid 1-2%. The Nifty IT index dropped 1.7%, wiping out some of the gains made over the past month.
Automobile Sector: Mahindra & Mahindra fell 2.4%, while Maruti Suzuki and Hyundai Motor India declined by 1% each.
Meanwhile, Adani Enterprises emerged as the top Nifty gainer, surging 4% and extending its impressive 11.5% rally from the previous session. Adani Ports also gained nearly 1%, providing some respite to the otherwise weak market sentiment.
PSU stocks such as Coal India, BPCL, and State Bank of India remained resilient and were among the top contributors to the Nifty’s gains.
Recent IT Sector Trends
Despite today’s dip, the IT sector has been a notable performer over the past month. The Nifty IT index has gained nearly 5%, driven by strong order books and optimism around BFSI and AI-related deals. Large-cap stocks like Infosys and TCS have benefited from robust exposure to the US market, while mid-cap players like Persistent Systems are expected to sustain high-teens growth in the medium term, according to Bernstein.
Market Outlook
The ongoing correction, with the Nifty down 8% from its September highs, has brought valuations to more reasonable levels. The index’s price-to-earnings (P/E) ratio has moderated to 21x from October’s peak of 25.8x, making the market attractive for selective investments.
Foreign portfolio inflows (FPIs) will play a key role in determining the market’s direction in the coming week. Analysts believe that valuations at stock- and sector-specific levels are increasingly appealing to both domestic and global investors.
Key Takeaway
While today’s market crash may have rattled investors, it’s essential to note that corrections offer opportunities. Keeping a close eye on FPI flows and sectoral trends will be crucial for navigating this volatility effectively.
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(Keywords: Sensex, Nifty, IT stocks, auto stocks, Indian stock market, market correction, Adani Enterprises, FPI inflows)
