The BSE Sensex, which is a benchmark index in India, dropped from its record levels on Thursday. It closed lower by 284 points in a volatile trading session. This decline was primarily due to profit-taking in the financial, IT, and oil sectors. The two-day rally came to an end as a result of negative trends in both the US and European markets.
The 30-share BSE Sensex fell by 284.26 points or 0.45%, settling at 63,238.89. Out of the 30 components of the index, 20 declined. The index reached a record high of 63,601.71 during the initial trading hours but faced volatile trends throughout the day and dropped to a low of 63,200.63.
The NSE Nifty, another major index in India, closed lower by 85.60 points or 0.45% at 18,771.25. This marked the end of its two-day gaining streak. The Nifty had reached an all-time high of 18,856.85 just a day before.
Among the major laggards in the Sensex pack were Bajaj Finance, Tata Motors, Asian Paints, Power Grid, NTPC, Infosys, Nestle, Reliance Industries, and UltraTech Cement. On the other hand, Larsen & Toubro, Tata Steel, HDFC, Bharti Airtel, HDFC Bank, and Mahindra & Mahindra were among the major gainers.
V K Vijayakumar, the Chief Investment Strategist at Geojit Financial Services, stated that a negative trigger from the global perspective was the statement made by the Fed chief Powell in his congressional testimony. Powell mentioned that “the process of getting inflation back to 2% has a long way to go,” indicating the possibility of further rate hikes in the rate hiking cycle.
In the broader market, the BSE midcap gauge fell by 1.07% and the smallcap index declined by 0.64%. All the indices, including power, utilities, telecommunication, commodities, IT, realty, consumer discretionary, energy, and metal, ended in the negative territory.
Shrikant Chouhan, the Head of Research (Retail) at Kotak Securities Ltd, highlighted that apart from weak global market cues, the US Federal Reserve’s testimony about inflation taking longer to cool caused concerns among investors as it suggests more rate hikes in the future. He also mentioned that the Sensex briefly touched a new high during the day before experiencing profit-taking.
In other global markets, Seoul ended in the green while Tokyo settled lower. European equity markets were trading lower, and the US markets closed in negative territory on Wednesday.
The global oil benchmark, Brent crude, declined by 1.39% to USD 76.05 per barrel.
According to exchange data, Foreign Institutional Investors (FIIs) bought equities worth Rs 4,013.10 crore on Wednesday.