Sensex falls 555 points, Nifty ends at 3-month low: 5 reasons behind today’s market decline

The equity benchmark indices ended lower on Tuesday (September 8), with the Sensex falling 555 points to 75,778 and the Nifty declining 144 points to 23,635. The Nifty slipped below 23,700 and ended at its lowest closing level in three months on weekly expiry day.

The market remained weak, with 30 Nifty stocks closing lower. Financial majors and Reliance Industries were among the biggest drags, with ICICI Bank, Axis Bank, Reliance Industries and HDFC Bank among the top Nifty losers.

The Nifty Bank fell 311 points to 56,778, while the Midcap Index gained 130 points to 62,916.

1. Financial stocks drag

ICICI Bank, Axis Bank, Reliance Industries and HDFC Bank were among the top Nifty losers, weighing on the benchmark.

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2. IT stocks under pressure

Information technology stocks remained under pressure on expectations of a Federal Reserve rate hike, with Wipro the top loser.

3. Select sectors gain

Defence stocks saw buying after Defence Acquisition Council approvals, with Hindustan Aeronautics (HAL) surging 4%. GE Vernova gained 9% after emerging as the lowest bidder for a Power Grid order. Midcap pharma names including Divi’s Laboratories, Piramal Pharma and Laurus Labs gained 3-4%.

4. Stock-specific moves

Bosch gained 2%, taking its two-day gain to 4%. Polycab moved higher, while KEI Industries ended with minor cuts, tracking copper prices. Raymond surged 11% ahead of its board meeting on fundraising, while Sansera Engineering rose 3% following a positive brokerage note.

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5. Profit booking

Maithan Alloys, IFCI and IDBI Bank saw profit booking, falling 4-10%. Market breadth favoured declines, with the advance-decline ratio at 4:5.

Jai Bala, CMT, Cashthechaos.com, on stocks, said, "I've been bullish on the capital goods space and the defence space, and I continue to maintain that. I have one from that, and need to be careful with position sizing.

It's Apollo Micro Systems. It's consolidated between ₹374 and ₹410 for the last couple of months, and it's breaking out today. So, with a stop-loss at about ₹374, I'm anticipating this to cross fresh 52-week highs. Probably has more potential, but it's better to be measured today."

From the Sensex basket, Hindustan Aeronautics Ltd, Bharat Electronics Ltd, Oil and Natural Gas Corporation Ltd, Adani Ports & Special Economic Zone Ltd, Hindustan Unilever Ltd and Nestle India Ltd were the major gainers.

ICICI Bank Ltd, SBI Life Insurance Company Ltd, Axis Bank Ltd, Reliance Industries Ltd, Wipro Ltd and HDFC Bank Ltd were the biggest laggards.

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Dharmesh Kant, Head-Research at Chola Securities, on jewellery stocks, said, "We are not a specific stock picker as far as the jewellery basket is concerned. We have always advocated basket play, and that theme still continues. This theme is primarily playing out in the low-grammage, low-carat kind of jewellery, where the trust is there if you are buying from a branded jeweller.

So, that is where the maximum volume traction is happening in tier three and four kind of cities, because from your local shop, you can move to a branded shop and that trust factor plays out. We think that this 30-35% growth is likely to continue in quarter two and quarter three as well. The reason being, all the macro data points, be it direct tax collection or indirect tax collection, the spending is there, and the per capita income is on the way up, so there's no dent out there.

Gold prices, to our mind, $4,000 to $4,200 an ounce is where the floor should be, and it's inching higher up, so that also gives confidence. So, this play is on, but Titan and Kalyan Jewellers of the world are the top picks out there, and in the smaller ones, we have been liking P N Gadgil and Thangamayil Jewellery. Lalithaa Jewellery is the new in the offing, but still I think give it one more quarter before a call can be taken. Thangamayil and P N Gadgil can still be bought at current levels."