Sensex falls 450 pts, Nifty below 25,250: IT sell-off among key factors behind market decline

Sensex, Nifty see profit booking in September 22 trade. 

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The equity benchmark indices declined on Monday, weighed by selling in information technology shares after the US administration raised H-1B visa fees.

Falling for the second day in a row, the Sensex dropped 466.26 points or 0.56 percent to settle at 82,159.97. During the day, it tanked 628.94 points or 0.76 percent to 81,997.29. The Nifty declined 124.70 points or 0.49 percent to 25,202.35.

Tech Mahindra, Tata Consultancy Service, Infosys, HCL Tech, Tata Motors, Trent, Reliance Industries and Larsen & Toubro were among the major laggards, while Eternal, Bajaj Finance, Adani Ports and UltraTech Cement were among the gainers.

Key factors behind market decline

1) Decline in IT stocks: IT stocks led the losses, with Tech Mahindra, Wipro, Infosys, HCLTech and Tata Consultancy Services among the top laggards. Tech Mahindra dropped nearly 4 percent. The Nifty IT index slipped more 3 percent as investors turned cautious over the impact of higher visa costs on profitability.

According to JPMorgan, the revised visa rules could raise prevailing H-1B wages, putting pressure on operating margins of Indian IT companies.

H-1B visa setback weighs on IT pack and broader index, sinking Nifty IT lower by 3 percent

2) Rise Crude prices: Brent crude, the global oil benchmark, rose 0.66 percent to USD 67.12 a barrel. Higher oil prices typically weigh on India’s import bill and inflation outlook, impacting investor sentiment.

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3) Global cues: Weak global cues also dampened trade. Hong Kong’s Hang Seng was down nearly 1 percent, while Wall Street futures pointed to a lower opening for US equities.

Technical Analysis 

"Last week’s move to the 25,400-25,600 zone along with the evening star candle formation suggests a pullback is likely," said Anand James, Chief Market Strategist, Geojit Financial Services. He added that support is seen at 24,880-24,800, while resistance remains capped near 25,669.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.