Stock market fall explained: Why Sensex dropped 388 points, Nifty slipped below 24,500

The equity benchmark indices BSE Sensex and NSE Nifty ended in the red on Tuesday (August 11) after a range-bound session, with the Nifty ending below 24,500.

The Sensex fell 388 points to 78,154, while the Nifty dropped 112 points to 24,472. The Nifty Bank slipped 241 points to 57,446, while the Midcap index declined 12 points to 63,843.

Healthcare stocks were among the key areas of weakness, with Max Healthcare and Apollo Hospitals ending lower after recommendations by a Parliamentary Panel on price caps for hospitals.

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The broader market action was driven by stock-specific moves following quarterly results. Zydus Lifesciences surged more than 7% after its first-quarter results, while Kolte-Patil Developers rose 12% and Bosch gained 4% following their respective Q1 results.

Jai Bala, CMT, Cashthechaos.com, on Kolte Patil, said, "On the 7th of April, I pointed out I was bullish on the real estate space, and it's heading to record highs. And the real estate sector has traded up to 940 from those levels. And today we have a breakout in Kolte-Patil.

Kolte-Patil is breaking out above a long-term trend line, and it went nearly to the circuit, and it's pulling back. That's a welcome move for me. But, unfortunately, it's run up too fast. So, you want to stagger your placement of orders here. So, a stop loss at about ₹435. I'm expecting this stock to scale about ₹700-odd."

Siemens also saw a sharp spike to the day's high after its Q1 results.

In the oil-related space, Chennai Petroleum and Mangalore Refinery and Petrochemicals (MRPL) surged up to 15% despite a rise in oil prices.

Life Insurance Corporation of India (LIC) gained more than 3% after the stock came out of the futures and options (F&O) ban. Vedanta Group companies moved off their day's highs in the final hour of trade amid the possibility of promoters buying and selling stakes in group companies.

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Meanwhile, Multi Commodity Exchange of India (MCX) rose more than 4% amid the possibility that the Securities and Exchange Board of India (SEBI) may allow foreign portfolio investors (FPIs) to trade in non-agricultural commodities.

The indices also saw adjustments following the Corporate Action System (CAS), with the Nifty adjusted by 22 points, the Sensex by 6 points and the Nifty Bank by 80 points.

From the Sensex basket, Dr Reddy's Laboratories Ltd, Eternal Ltd, Hindalco Industries Ltd, Infosys Ltd, Titan Company Ltd and Eicher Motors Ltd were the major gainers.

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Max Healthcare Institute Ltd, UltraTech Cement Ltd, Tata Consumer Products Ltd, Nestle India Ltd, Apollo Hospitals Enterprise Ltd and Axis Bank Ltd were the biggest laggards.

Jai Bala, CMT, Cashthechaos.com, on markets, said, "The Nifty is teetering around the breakout level, and as long as it stays above 24,100, the breakout that it had tentatively before the correction started, I think that's still valid.

But we don't want to see it drop too far below 24,100, and the risk actually comes from cross-assets, and mainly from crude. Crude should not cross the July 31 high. That's roughly about 86–87 on the WTI.

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I don't exactly recall the level on Brent. So, when it comes to the banking index, the banking index is slightly better off versus the Nifty. The support is about 55,750 for the banking index. As long as it stays above that, I think the markets are good, but, you know, the broader bull market continues.

Like I pointed out last week, the Nifty Equal Weight Index is at a record high. The Nifty Auto Index has joined it at record highs. So, the broader markets are the place to be. Wait for the large-cap Nifty to join the breakout, but it's better to be focused on the broader market rather than on the large-cap Nifty."