Opening Trade Sees Significant Decline in Sensex and Nifty

On Friday, the benchmark stock indices, Sensex and Nifty, experienced a decline of over 1% in opening trade. This downturn was primarily driven by heavy selling in financials, IT, and capital goods stocks, influenced by weak global trends.

The 30-share BSE barometer plunged 730.17 points or 1.22% to 59,076.11, with 25 of its constituents trading in the red. Similarly, the broader Nifty of the National Stock Exchange tanked 201.05 points or 1.14% to 17,388.55.

Analysts attribute this decline to weak Asian markets and overnight losses in the US market, which triggered heavy selling in financials, banking, IT, and capital goods shares.

Impact of US Market on Global Sentiments

The sell-off in US markets was triggered by a 60% crash in SVB Financials, a bank that mainly funds startups. This impacted sentiments and banking stocks took a beating on concerns that rising interest rates might trigger loan repayment defaults, according to V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Among Sensex shares, HDFC fell the most by 2.53%. Other major losers included IndusInd Bank, HDFC Bank, L&T, ICICI Bank, Reliance Industries, Axis Bank, Infosys, TCS, and Ultratech Cement. However, Tata Motors bucked the trend, gaining 0.75%, with Bharti Airtel and Maruti also advancing.

Global Market Trends

In Asia, markets in Hong Kong, Shanghai, Tokyo, and Seoul declined following losses in US shares. The S&P 500 tumbled 1.8%, The Dow Jones Industrial Average shed 1.7%, and the Nasdaq composite fell 2.1% as investors remain anxious about the prospect of more aggressive action by the Federal Reserve to fight inflation with higher interest rates.

The 30-share BSE Sensex ended 541.81 points or 0.90% lower at 59,806.28, while the broader NSE Nifty declined 164.80 points or 0.93% to 17,589.60. Foreign Institutional Investors (FIIs) emerged as net sellers in the capital market on Thursday, selling shares worth Rs 561.78 crore, according to exchange data.