Frontline indices, the Sensex and the Nifty 50, suffered strong intraday losses on Wednesday, 11 March, amid profit booking after healthy gains in the previous session.
The 30-share pack crashed over 1,000 points, or 1.3%, to fall to an intraday low of 77,161, while the NSE counterpart Nifty 50 touched the day’s low of 23,971.60, falling 1.20%.
The mid and small-cap indices, however, outperformed. The BSE 150 MidCap Index rose by 0.80%, while the BSE 250 SmallCap Index jumped more than 1% during the session.
The overall market capitalisation of BSE-listed firms dropped to nearly ₹445 lakh crore from ₹447 lakh crore in the previous session, making investors poorer by about ₹2 lakh crore in a single session.
Why is the stock market falling?
Let’s take a look at five key factors behind the fall in the Sensex and the Nifty 50:
1. Profit booking in banking, finance heavyweights
Profit booking in select banking and finance heavyweights, including HDFC Bank, ICICI Bank, Axis Bank, and Bajaj Finance, is among the main reasons behind the decline in equity benchmarks.
Other sectoral indices, such as Bharti Airtel, Reliance, and Mahindra and Mahindra, too, were among the top drags on the benchmarks.
The domestic market is witnessing profit booking amid persisting geopolitical risks due to the ongoing war between Iran and the combined forces of the US and Israel.
2. Rupee slips near 92
The Indian rupee declined by 17 paise to drop to 91.97 per dollar in morning trade on Wednesday, weighing on market sentiment.
According to Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities, the rupee’s expected trading range remains between 91.25 and 92.60, with crude price movement and dollar index direction continuing to guide the currency’s near-term trend.
(This is a developing story. Please check back for fresh updates.)