Stock Market Volatile On March 3: Why Sensex Erased 73,000 Levels, And Nifty Struggled At 22,000 On Monday?

Stock market Update: The Indian stock market turned volatile with Sensex erasing its 73,000 mark and Nifty 50 struggling to hold 22,000 levels. Although, the benchmarks opened in green, however, were toppled by bears on broad-based selling with oil & gas, PSU Banks, Media and metal stocks taking the worst hit. Sensex and Nifty's performance is extending its losing streak after closing February month with over 5% drop each.

Sensex, Nifty:

Sensex dropped by over 409 points to hit an intraday low of 72,788.96. The benchmark opened at 73,427.65 and even touched an intraday high of 73,649.72 before giving up gains.

Meanwhile, Nifty plunged by 114 points to hit an intraday low of 22,010.70. The benchmark had opened at 22,194.55 and touched an intraday high of 22,261.55 before pulling back.

Heavyweight Reliance Industries share price dropped by 3% followed by IndusInd Bank, Bajaj Finserv, Zomato, Asian Paint, Adani Ports, and Tata Steel stocks that dropped by 1.5% to 3%. On the other hand, the top gainers were Ultratech Cement, Infosys, Bharti Airtel, M&M, HCL Tech and TCS which surged by 0.5% to 2%.

India's volatility index was up by 3%, while Nifty Midcap 100 and Nifty Smallcap 100 indexes dropped by around 2% each. Bank Nifty was down by 1%, however, Nifty PSU Bank dropped by 2%. Nifty Metal, Nifty Media and Nifty Oil & Gas indexes dipped by 1.5% to 2%.

Why Sensex, Nifty Are Volatile?

As per Trading Economics data, the India's equities fell 310 points, or 0.4%, to 72,890 in early trade on Monday while lingering at its lowest level since early June 2024, extending losses from the previous session, with almost all sectors trading in the red led by oil & gas and PSU bank. Midcap and smallcap indexes also plunged by 1.6% and 2.7% as panic-selling gripped the broader market. GDP data continued to pressure sentiment, after the country's economy grew 6.2% in the December quarter, below market forecasts of 6.3%, and the RBI's estimates of 6.8%.

Furthermore, it added, worriers global trade war dampened sentiment ahead of the imposition of tariffs on Canada and Mexico on Tuesday amid persistent foreign fund outflow. Traders also anticipated the release of US monthly jobs reports and PMI data to guide the Fed monetary policy path.

Also, Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services pointed out that the main triggers for the sustained FII selling in India have been the high valuations and the attractive US bond yields. These important macros are undergoing a slow shift. Largecap valuations are now fair and in segments like financials attractive.

He added, US 10-year bond yields have declined to 4.21%. So, there is a possibility of FIIs reducing their selling, going forward. There is good news on India's growth front. The Q3 GDP growth numbers picking up from 5.6% in Q2 to 6.2% in Q3 and suggesting above 7 % growth in Q4 is indicative of cyclical recovery which bodes well for the stock market.

The correction in the market is an opportunity for long-term investors to buy high quality stocks. The February auto sales numbers reveal excellent performance from M&M and Eicher. IT stocks also are turning attractive.

"It is difficult to predict when the market will bottom out. But this is the time to start buying without bothering about the near-term volatility," Vijayakumar added lastly.