Sensex settles 300 pts lower from day’s high, Nifty ends below 26,150: 3 key reasons behind market decline

Stock Market Today: Sensex, Nifty see profit booking in trade. 

• Sensex and Nifty ended lower amid profit-booking and FII selling
• IT stocks fell after US changed H-1B visa rules, impacting sector sentiment
• Nifty's 26100 level acted as support, with sideways bias expected for trades

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The benchmark equity indices Sensex and Nifty slipped from their intraday highs on Wednesday amid profit-booking in select sectors and continued selling by foreign institutional investors (FIIs).

The Sensex dropped by 116.14 points or 0.14 percent to settle at 85,408.70. During the day, it hit a high of 85,738.18 and a low of 85,342.19. The Nifty edged lower by 35.05 points or 0.13 percent to 26,142.10.

Key factors behind the market decline

1) FII selling: Foreign institutional investors offloaded equities worth Rs 1,794.80 crore on Tuesday, according to exchange data. This was the second straight day of selling after FIIs had turned buyers for three consecutive sessions.

2) Profit-booking in select sectors: Profit-taking was seen in IT, pharma and oil and gas stocks. Sun Pharmaceutical Industries and Dr Reddy's Laboratories were among the major laggards, falling up to 1 percent.

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3) Weakness in IT stocks: Shares of IT companies declined after the US administration announced changes to the H-1B work visa system. Under the new framework, visas will no longer be allocated purely through a lottery. Instead, applications will be weighted to prioritise higher-paid and more skilled foreign workers, the US Department of Homeland Security said.

This marked the second consecutive session of decline for IT stocks after they had risen for four straight sessions.

Coforge, Tech Mahindra, other IT shares fall up to 1% as US scraps H-1B lottery

Technical view

Anand James, Chief Market Strategist at Geojit Investments Ltd, said the 26,100 level continued to act as a support for the Nifty.

"The 26,100 region pencilled in as the downside marker remained intact yesterday, providing a launch pad for yet another swing higher. Towards this end, 26,300-26,100 will be the starting range for the day with expectations of large moves on break of either extremity. Meanwhile, yesterday's doji lends a sideways bias for initial trades today," James said.

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