Bloodbath On D-Street: Market Opens With Deep Cuts, Sensex & Nifty Fall; Axis Bank Slumps 6% On Q1

The Indian stock markets opened lower on July 25, 2024, influenced by weak global cues. The Nifty 50 index started the day at 24,250 points, a dip from its previous close, and the Sensex, India's benchmark index, was down by 596.44 points, or 0.74%, closing at 79,552.44. The Nifty dropped by 177.30 points, or 0.73%, to settle at 24,236.20. Market breadth showed a negative trend with 912 shares advancing, 1,608 shares declining, and 112 shares remaining unchanged.

Despite the overall market downturn, a few stocks managed to post gains. Among the major gainers were SBI Life Insurance, Larsen & Toubro (L&T), Tata Motors, Nestle India, and Hindustan Unilever Limited (HUL). Conversely, significant losers included Axis Bank, Hindalco Industries, Tata Steel, Power Grid Corporation, and Shriram Finance.

Aditya Gaggar, Director of Progressive Shares pointed out, "BankNifty led correction dragged the Index lower at 24,414 to form a Spinning Top candlestick pattern. The level of 24,200 will remain a crucial support and an early indication from GIFT Nifty suggests a tepid opening of the Indian equities around the similar levels. A sustainable move below the mentioned support level will pull the Index further to 24,000. On the flip side, 24,450 will act as a stiff hurdle. BankNifty is likely to remain in the grip of bears. Among the sectors, FMCG, IT and Pharma are likely to provide some support to the Index while high beta segments such as Realty and Metal will add to the pressure."

The Indian Rupee opened at 83.70 per US Dollar on Thursday, nearly stable compared to the previous close of 83.71.

The downturn in Indian indices can be attributed to the significant sell-off in the US stock market on Wednesday. The US markets experienced a considerable decline driven by disappointing earnings from major tech companies, particularly Alphabet (Google's parent company) and Tesla.

The Dow Jones Industrial Average dropped by 504.22 points (1.25%) to 39,853.87. The S&P 500 fell by 128.61 points (2.31%) to 5,427.13. The Nasdaq Composite plunged by 654.94 points (3.64%) to 17,342.41, marking its largest single-day percentage decline since October 2022.

Tesla saw its worst single-day fall since September 2020, plummeting by 12.3% due to missed profit estimates and delays in its Robotaxi project. Alphabet shares fell by 5%, the largest decline since May 31, following announcements of high capital expenses and a slowdown in advertising growth. Other notable declines included Super Micro Computer Inc, Nvidia, Broadcom, Meta Platforms, Microsoft, and Apple.

Investors are awaiting upcoming earnings reports from major firms. Nestle India is scheduled to report today. Tech Mahindra, DLF, Adani Energy, Mphasis, Ashok Leyland, and United Breweries are also expected to report their first-quarter earnings today.

The ripple effect of the US market's poor performance was felt across global markets, including India. The substantial decline in US tech stocks, which have been pivotal in driving market sentiment, raised concerns about the sustainability of the recent bull rally. This sell-off was primarily fueled by an artificial intelligence frenzy, which now appears to be cooling off, adding to the market's volatility.

The Indian stock market's dip on July 25 can be traced back to the negative global cues stemming from the US market's significant losses. With the Indian indices reacting to these international trends, investors should brace for continued volatility. The upcoming earnings reports from major tech firms will be closely watched, as they will likely set the tone for market movements in the near future.