Freaky Friday! Sensex, Nifty fall up to 1% as heavyweight stocks crack

While Nifty tumbled 446 points from its all-time high of 22,794, the 30-packed Sensex crashed 1,628 points from day's high of 75,095

Losses in heavyweight stocks prompted a fall in benchmark indices Sensex and Nifty on May 3. While Nifty tumbled 446 points from its all-time high of 22,794, the 30-packed Sensex crashed 1,628 points from day's high of 75,095. Analysts attributed this correction to pre-Lok Sabha election outcome jitters, earnings season, and a high level of margin trading.

However, experts hope the bullish momentum would remain intact in the near-term, given political stability is established.

The Sensex settled 764 points or 1.02 percent down at 73,846, and the Nifty was down 191 points or 0.85 percent at 22,456. The market breadth steered towards losers - about 1,053 shares advanced, 2,197 shares declined, and 79 shares unchanged.

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Mayank Mehraa, smallcase Manager & Principal Partner at Craving Alpha believes that these swift corrections prevent any complacency and would foster a more sustainable bull run. "Despite geopolitical concerns, the market's ability to swiftly recover and capitalise on positive momentum reflects a dynamic and resilient investment landscape, suggesting potential for continued growth in the coming weeks," he said.

Some of the factors that weighed markets on May 3 were Q4 results announcement, pre-election results' jitters rally, and high level of margin trading, said Amit Goel, Co-Founder & Chief Global Strategist at Pace 360. He expects volatility to rise even further as we inch closer to the election results' date.

All sectors drowned in the sea of red on May 3, while volatility index India VIX jumped over 10 percent to 14.84. Among sectors, the worst hit were Nifty IT, Nifty Realty, Nifty Auto, and Nifty PSU Bank indices.

Market attention is now focused on the US job market report due on May 3. The data is likely to show that the US labour market remains strong. While US non-farm pay-roll additions are expected to slow in April, they are expected to remain well above pre-Covid levels.

Economists polled by Reuters forecast 243,000 jobs in April, with estimates ranging from 150,000 to 280,000.

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