Stock Market News: Domestic stock markets closed with a decline on the fourth trading day of the week. Heavy selling was seen in IT stocks due to weakening expectations of cut in US interest rates and fear of possible pressure on the income of IT companies from Artificial Intelligence (AI). BSE’s 30-share Sensex closed at 83,674.92, falling 558.72 points or 0.66%. During trading, at one time it fell by 716.97 points to the level of 83,516.67. Whereas NSE Nifty slipped 146.65 points or 0.57% and closed at 25,807.20 points.
Why is the market falling?
The biggest reason for the decline was pressure in IT shares. A decline of up to 6% was recorded in Tech Mahindra, Infosys and Tata Consultancy Services (TCS). Apart from this, HCL Technologies, Mahindra & Mahindra, Hindustan Unilever, Reliance Industries, HDFC Bank, IndiGo, Kotak Mahindra Bank and Adani Ports also remained in loss. However, some shares showed strength in the market. Bajaj Finance, ICICI Bank, SBI, Bharat Electronics, Asian Paints, Larsen & Toubro, Bharti Airtel and Tata Steel closed with gains.
According to Vinod Nair, Head of Research, Geojit Investments Limited, the likelihood of a cut in policy rates by the Federal Reserve has reduced after strong employment data in the US, which affected investor sentiment. Besides, the fear of pressure on the income of the service sector, especially IT companies, due to the increasing impact of AI also weakened the market. The ongoing tension between America and Iran also forced investors to adopt a cautious attitude.
There was weakness in the broader market as well. BSE Midcap index fell 0.48% and Smallcap index fell 0.28%. Among sectoral indices, ‘Focused IT’ witnessed a major decline of 5.40 per cent and IT segment of 5.29 per cent. Apart from this, realty, oil and gas, energy, service and FMCG sectors also remained in the red.
What do experts say?
The impact of the decline was especially visible on TCS. After the 5.41% fall in the company’s shares, its market capitalization fell below Rs 10 lakh crore for the first time and at the end of trading it stood at Rs 9,95,661.50 crore.
According to Siddharth Khemka of Motilal Oswal Financial Services, the third quarter results are nearing an end, hence the market will now focus on company-specific activities. The direction of the market in the coming time will depend on global and domestic inflation data, trade-related developments, inflows of foreign institutional investors (FIIs) and AI-related concerns, which may increase volatility.
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Also read: Retail inflation rate was 2.75% in January, instead of 2012, now the calculation is done on the new 2024 base year.
