Constant selling by foreign portfolio investors amidst weak results of the company led to a strong decline in the market today and the major index rolled to their lower levels of June 6, 2024. Uncertainty about American policies saw uproar in global markets, which also showed the effect in the domestic market.
The Sensex fell 824 points or 1.1 per cent to close at 75,366. The Nifty closed at 22,829 with a loss of 263 points or 1.1 per cent. Both index closed at the lowest level after June 6, 2024. The Nifty has closed below 23,000 for the first time since June 7, 2024.
The market saw all -round selling pressure and the Nifty Smallcap fell by 4 per cent and the Nifty midcap by 3 per cent. India VIX jumped 8.3 per cent to 18.13 per cent. This indicates that there may be further uproar in the market. Meanwhile, the market capitalization of listed companies on Bombay Stock Exchange declined by Rs 9.2 lakh crore to Rs 410 lakh crore. The market has been under heavy pressure for the last few months due to the selling of foreign portfolio investors, the income growth of companies and global uncertainty. Experts say that the market may remain weak now as investors are waiting for the US Federal Reserve meeting on 28-29 January and the general budget coming on 1 February.
Vinod Nair, head of research at Geojit Financial Services, said, “The market is declining due to all -round selling of shares in all regions in view of soft income and weak perception worldwide. The situation has become more serious due to the US policies regarding trade. The market may remain upset this week before events like Fed meeting, handling of futures deal and Union Budget.
Foreign portfolio investors sold shares worth Rs 5,015 crore and their total selling was Rs 64,000 crore this month. The month of January was the second worst month for the market after October 2024 in terms of selling of foreign investors. In October 2024, foreign investors sold Rs 92,000 crore. Desi institutional investors bought shares worth Rs 6,642 crore.
Market expert Sunil Subramaniam said, ‘The results of the companies have not yet been in line with the market expectations, which has increased the selling of foreign investors. Desi institutional investors are making profits in smallcap and midcap stocks in view of high evaluation. Desi institutional investors have a lot of money, which they will invest in the market only after the quarterly results estimate, budget and clarity on the RBI policy.
The biggest decline came in IT, telecom, electricity, consumer durables, oil and gas and health sector shares. The Sensex shares recorded the biggest decline in HCL Tech, Zomato, Tech Mahindra, Power Grid and Infosys. Hindustan Unilever, Mahindra & Mahindra, SBI and L&T were in profit. BSE stood at 3,522 shares in loss and 593 profit. There was no decrease in the price of 119 shares.