Indian Equity Indices Decline After Strong Opening

Indian benchmark stock market indices Sensex and Nifty50 opened strong on Friday, driven by global cues and Bajaj Finance's surge. However, they declined intra-day, with Sensex plummeting 760.74 points and Nifty50 falling 186.35 points, due to losses in heavyweight stocks.

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Indian Equity Indices Decline After Strong Opening on May 3, 2024

Indian Equity Indices Decline After Strong Opening

Indian benchmark stock market indices started trading on a strong note on Friday, May 3, 2024, driven by positive global cues and a surge in shares of Bajaj Finance. The S&P BSE Sensex rose above 75,000 in early trade, while the NSE Nifty50 hit a fresh record high of 22,794.70.

Around 10:05 am, the Sensex was up 173.35 points at 74,784.46, and the Nifty50 traded 68.70 points higher at 22,716.90.

However, the indices declined intra-day, with the BSE Sensex plummeting 760.74 points or 1.02% to 73,850.37 as of 11:53 am. The Nifty 50 also declined 186.35 points or 0.82% to 22,461.85 by 11:54 am. All sectoral indices, except the healthcare index, traded in the negative territory. The Nifty IT index was one of the top losers, declining 1.30% to 32,772.00, with major losers including Coforge (-9.41%), HCL Technologies, TCS, LTTS, and Tech Mahindra. The Nifty PSU Bank and Media stocks also declined over 1%.

Why this matters: The decline in Indian equity indices has significant implications for investors and the overall economy, as it can impact market sentiment and influence investment decisions. Moreover, the volatility in the market underscores the importance of monitoring key economic indicators and global developments to make informed investment choices.

The decline in Indian equity indices was primarily attributed to losses in heavyweight stocks such as Reliance Industries, HDFC Bank, and IT companies. As of 11:58 am, the major laggards on the NSE were L&T (-2.23%), Reliance (-2.02%), Maruti (-1.87%), Bharti Airtel (-1.87%), and Nestle India (-1.84%). In contrast, the top gainers were Coal India (2.38%), Bajaj Finance (2.03%), ONGC (1.98%), Grasim (1.58%), and Bajaj Finserv (1.56%).

Bajaj Finance shares gained as much as 7% in early trade, following the Reserve Bank of India's (RBI) decision to lift restrictions on two of its lending products. Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd, said, "The removal of restrictions on Bajaj Finance's eCOM adds to the upbeat market sentiment. Investors are eagerly awaiting the US jobs report for April and keeping an eye on Q4 corporate earnings from India Inc."

Of the 3,794 stocks traded on the BSE as of 11:59 am, 2,353 declined, 1,287 advanced, and 154 remained unchanged. 250 stocks traded in the upper circuit, while 205 hit the lower circuit. Despite the positive opening, volatility remained high in the broader market indices.

Market conditions are shaped by various domestic and global factors, investors remain cautious ahead of the US jobs report for April and the ongoing Q4 corporate earnings season in India. The volatility in the market highlights the importance of closely monitoring key economic indicators, corporate earnings, and global developments for investors to formulate sound judgments. The surge in Bajaj Finance shares earlier in the day, following the RBI's decision to lift lending restrictions, provided some support to the market sentiment, but it was not enough to sustain the initial gains.

Key Takeaways

  • Indian stock market indices Sensex and Nifty opened strong on May 3, 2024, driven by global cues and Bajaj Finance surge.
  • However, indices declined intra-day, with Sensex plummeting 760.74 points or 1.02% to 73,850.37.
  • Nifty IT index was one of the top losers, declining 1.30% to 32,772.00, with major losers including Coforge, HCL Tech, and TCS.
  • Bajaj Finance shares gained 7% after RBI lifted restrictions on two lending products, but couldn't sustain market gains.
  • Market volatility remains high, with investors cautious ahead of US jobs report and Q4 corporate earnings season in India.