Sensex slides over 500 pts, Nifty below 24,550: Muted global cues among key factors behind market decline

Sensex, Nifty traded lower in Thursday's trade amid weak global cues. 

Benchmark equity indices Sensex and Nifty declined on Thursday, dragged by selling in banking, IT and FMCG stocks and weak cues from Asian markets ahead of a closely watched speech by US Federal Reserve Chair Jerome Powell.

The Sensex tumbled 568.40 points or 0.69 percent to an intraday low of 80,762.16, while the broader Nifty fell 172.45 points or 0.69 percent to 24,494.45.

Power Grid Corporation of India, NTPC, Cipla, IndusInd Bank and Infosys were the major laggards, declining up to 1.5 percent.

Key factors behind Thursday’s market decline

1) Powell speech in focus: Investors remained cautious ahead of a speech by US Fed Chair Jerome Powell later in the day. Market participants expect clues on future interest rate direction after the Fed last week held rates steady. Traders fear that any hawkish undertone could dampen risk sentiment globally.

2) Concerns over ‘Sell India; Buy China’ strategy: VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, flagged the possibility of foreign investors rotating money out of Indian largecaps into Chinese equities.

"The market appears to be heading for a near-term consolidation phase, with mid and smallcaps continuing to outperform. The robust FII buying that supported largecaps may taper off if a tactical ‘Sell India; Buy China’ trade emerges," he said.

3) Rupee under pressure: The Indian rupee depreciated by 32 paise to 85.64 against the US dollar in early trade, tracking weakness in domestic equities. Forex traders said the local currency faced pressure ahead of Powell’s remarks, which are expected to provide direction on monetary easing by the US central bank.

4) Weak Asian market cues: Asian markets traded in the red, with indices in South Korea, Japan, China, and Hong Kong all witnessing declines. Overnight, US markets ended on a mixed note, offering little support to risk assets in Asia.

Technical view

Anand James, Chief Market Strategist at Geojit Financial Services, said the Nifty remains in a tight range with immediate levels seen at 24,770–24,570. “A symmetrical triangle formation on the daily chart suggests a bias towards an upside towards 25,200. However, momentum indicators don’t favour a sharp rise just yet. On the downside, the 24,500–24,400 zone could offer support and limit further correction,” he said.

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