Sensex crashes 700 points, Nifty slips below 24,100 as markets give up early gains; IT, auto stocks drag

IT stocks and automobile shares were the top drag on November 28, with the respective sectoral indices falling 1.7 percent and 0.8 percent.

The Indian equity markets gave up early morning gains on November 28, with benchmark indices Sensex and Nifty crashing about 0.7 percent in a sudden fall. The markets appear to be losing the momentum gained from the election results, slipping from the crucial resistance zone of 24,350.

At 10:45 am, BSE Sensex was down 557 points or 0.7 percent at 79,677, and NSE Nifty was down 151 points at 24,124. The market breadth was still positive, with 2,086 shares advancing, 1,152 shares falling, and 105 shares remaining unchanged.

IT stocks and automobile shares were the top drag, with the respective sectoral indices falling 1.7 percent and 0.8 percent. Infosys and Tech Mahindra declined 2.3 percent, while TCS and HCL Tech fell 1-2 percent each, emerging among top negative contributors to the Nifty.

In automobile stocks, Mahindra & Mahindra fell 2.4 percent, while Maruti Suzuki and Hyundai Motor India were down 1 percent each.

On the other hand, Adani Enterprises stock was the top gainer on the Nifty, rising nearly 4 percent and extending its 11.5 percent surge from the previous session. Adani Ports and SEZ share price was up be about 1 percent.

PSU stocks Coal India, BPCL, and State Bank of India also gained, and were among Nifty's top gainers. HDFC Bank, which rose earlier today to top Rs 14 lakh crore in market capitalisation, slipped mildly into the red.

Also read | Nifty 50 targets for FY25: Bull, Bear, and Base case scenarios

The IT sector stocks have recently gained momentum. Over the past month, the Nifty IT index climbed nearly 5 percent, supported by robust order books and optimism around BFSI and AI-related deals. While large-cap players like Infosys and TCS remain favoured for their strong US market exposure, mid-cap firms such as Persistent Systems are projected to deliver high-teens growth in the medium term, said Bernstein in a recent note.

The recent market correction, which saw the Nifty decline by 8 percent from its September highs, has brought valuations to more reasonable levels, improving attractiveness for both foreign and domestic investors. Going ahead, the direction of FPI flows over the next week will be critical in determining the market’s trajectory, said Bathini.

With valuations moderating to an estimated price-to-earnings (P/E) ratio of 21x from October’s peak of 25.8, the valuation has turned attractive at stock-specific and sector-specific levels.

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