Why Is Stock Market Falling Today? Nifty Below 25,000; Market Sees Profit Booking After Diwali Rally

Stock market opened higher on Monday after the Sunday's special Muhurat trading session on Diwali, when the Nifty closed at 24,986.40, down 0.18%, and the Sensex ended at 80,999.40, down 0.04%.

This Morning, Nifty started at 25,076.40, but the gains faded within minutes. The Nifty touched a high of 25,084.05 before sliding to a low of 24,907.75, slipping below the key 25,000 level.

India VIX fell 9.01% to 16.77 while Asian markets were mostly higher, with the Nikkei up over 3% and Taiwan's TAIEX surging more than 5%.

As of 11 AM on Nov 9, the Sensex was down 419.91 points, or 0.52%, at 80,579.49, and the Nifty50 was down 123.15 points, or 0.49%, at 24,863.25.

Why Is the Market Falling Today? Top Reasons dragging the Indices

The biggest weight on the indices today is the technology sector. Nifty IT was the worst-performing sectoral index, down as much as 1.7% early in the session, with Mphasis, HCLTech and Infosys among the top losers.

The second reason is the profit booking, markets had a strong run going into the weekend. On Friday, November 6, the Sensex closed at 81,028.02, up 2.17%, and the Nifty at 25,030.35, up 2.01%. As per BSE data, Foreign investors bought a net Rs. 45,960 crore of equities between November 2 and 6, while domestic institutions sold about Rs. 24,197 crore.

Tata Steel is a good example: despite a 16.2% YoY rise in Q2 profit to Rs. 3,700 crore, its shares slipped 1.7% and snapped a five-day winning run.

The market is also watching the US-Iran talks closely as Brent was trading near $97 a barrel this morning.

Market Expert Analysis & Outlook

"The previous week was exceptional for the market, with the Nifty gaining 8.5% and the Bank Nifty rising 7.5% on a weekly basis. More importantly, both indices have crossed their crucial swing levels of 24,800 and 79,150, respectively, strengthening the medium-term bullish setup. Sustaining above these levels could gradually open the upside towards the next major hurdles at 26,000-26,350 for the Nifty and 85,000-85,900 for the Bank Nifty." said Shrikant Chouhan, Head Equity Research, Kotak Neo.

"However, after such a sharp rally, we should not expect the market to reach these levels in a straight line. Periodic corrections or pullbacks towards key retracement levels and major moving-average supports would be healthy and could provide fresh entry opportunities. Therefore, our preferred strategy remains to buy on dips with a medium-term perspective, with key support zones placed at 24,800-24,500 for the Nifty and 80,400-79,500 for the Bank Nifty. As long as these broader support zones hold, the overall market structure remains positive." he further added.

Today's Sectorwise Performance: Top Losers and Gainers

PSU banks led the gainers, with the Nifty PSU Bank up 2.11% to 8,766.55 and Nifty Pharma up 2.09% to 29,020.55, by Nifty Healthcare, which added 1.67% to 17,469.10. State Bank of India was the top Nifty gainer at 2.48%, with Apollo Hospitals, HDFC Bank, Dr Reddy's and ICICI Bank also in the green, while Nifty Bank rose 0.50% to 59,142.40 and limited the damage to the headline indices.

On the losing side, IT was the weakest sector. The Nifty IT index fell as much as 1.7% early on and was down 1.32% at 32,436.55 later in the session, as traders booked profits in a sector that had gained 13.51% in 30 days but is still down 7.63% over a year.

HCLTech, Infosys, Tech Mahindra and TCS were among the biggest drags, with HCLTech falling 1.86%, and Bharti Airtel, SBI Life and Bajaj Finance also slipped. Other weak pockets included Nifty Cement, down 1.13% to 14,462.60, and Nifty Metal, down 0.67% to 12,637.70, while Nifty Realty fell 0.90%, FMCG declined 0.53% and Auto dropped 0.45%.

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