Indian Stock Market Falls as Investors Await Union Budget 2024
New Delhi, July 19: The Indian stock market closed on a negative note on Friday. The Sensex dropped by 738.81 points to 80,604.65, and the Nifty fell by 275.25 points to 24,530.90. Out of the Nifty companies, only four saw gains while 46 experienced declines.
Despite this drop, the market has shown resilience over the past seven weeks, with both the Sensex and Nifty posting cumulative gains. This indicates a steady bullish sentiment, even with short-term corrections.
Top Gainers and Losers
Infosys, ITC, Asian Paints, and Britannia were the top gainers in the Nifty index. Infosys shares closed 1.8% higher at Rs 1789, reaching an intra-day high of Rs 1844. The IT sector is expected to see a potential rerating, driven by positive forecasts from industry leaders like Infosys and TCS.
On the other hand, Tata Steel, JSW Steel, BPCL, Hindalco, and ONGC were among the top losers, contributing to the market’s decline.
Expert Opinions
Ajay Bagga, a market and banking expert, explained that weak global cues and profit-taking ahead of the Union Budget 2024 led to the market’s fall. He noted that all sectors were in the red and that this is normal consolidation around all-time high levels. He expects the market to wait for the Union Budget details before taking fresh positions.
Bagga also mentioned that a Fed rate cut in the September FOMC meeting seems likely, leading to sector rotation. High-growth, momentum stocks are being sold, and underperforming sectors are being bought. However, emerging markets may not benefit immediately from capital flows redirected from the US.
Shrikant Chouhan, Head of Equity Research at Kotak Securities, said that the upcoming Union Budget would be a key event for market participants. He also noted that stock-specific action would continue over the next few weeks due to the Q1FY25 result season.
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, highlighted the underperformance of overvalued smaller stocks and the outperformance of reasonably valued large-cap stocks. He believes this trend indicates a sustainable rally without the risk of overheating.
Market Disruptions
While major stock exchanges like the BSE and NSE remained unaffected by global technical issues linked to Microsoft Azure, several trading platforms faced disruptions. These issues impacted market accessibility for users across various brokerage firms, adding to the day’s volatility.
Conclusion
Although the Indian stock market experienced a significant decline on Friday, the overall trend over the past seven weeks remains positive. Investors are advised to stay vigilant and await the upcoming Union Budget for clearer market direction.
Doubts Revealed
Sensex -: Sensex is a stock market index in India that tracks the performance of 30 well-established and financially sound companies listed on the Bombay Stock Exchange (BSE).
Nifty -: Nifty is another stock market index in India, but it tracks the performance of 50 companies listed on the National Stock Exchange (NSE).
Union Budget -: The Union Budget is an annual financial statement presented by the Government of India, detailing its expected revenue and expenditure for the upcoming year.
Infosys -: Infosys is a large Indian company that provides information technology and consulting services.
ITC -: ITC is an Indian company that operates in various sectors like hotels, FMCG (Fast-Moving Consumer Goods), and paperboards.
Asian Paints -: Asian Paints is a leading Indian company that manufactures and sells paints and coatings.
Britannia -: Britannia is a well-known Indian company that makes biscuits, dairy products, and other food items.
Tata Steel -: Tata Steel is one of the largest steel manufacturing companies in India.
JSW Steel -: JSW Steel is another major steel manufacturing company in India.
BPCL -: BPCL stands for Bharat Petroleum Corporation Limited, an Indian government-owned oil and gas company.
Hindalco -: Hindalco is an Indian company that produces aluminum and copper.
ONGC -: ONGC stands for Oil and Natural Gas Corporation, an Indian government-owned company involved in oil and gas exploration and production.
Global cues -: Global cues refer to the economic and financial signals from other countries that can affect the stock market in India.
Profit-taking -: Profit-taking is when investors sell their stocks to lock in gains they have made, which can sometimes cause the stock prices to drop.
