Nifty Under 23,750, Sensex Down 1%; Banking Stocks trade in Red

Indian benchmark indices Sensex and Nifty crashed by over 1% during the morning session, buoyed by dip in public sector banking stocks. Market also hinted at heightened volatility on the back of 6% rise in India VIX.

As of 12:50 pm, Sensex was trading 1.02% lower at 78,415.32, while Nifty was down 1.05% at 23,751.90.

Nifty IT index was the top gainer on the bourses as it clocked gains over 1%. The gains were led by Tech Mahindra, LTIMindtree and Infosys.

The Nifty PSU Bank index witnessed pressure as it sank by 2%. Shares of Union Bank, Central Bank and Bank of Baroda declined by 6%.

The street is also awaiting the Q3 numbers ending in December.

Kranthi Bathini, Director of Equity Strategy at WealthMills Securities said, “The focus now is on earnings growth trajectory, which will be crucial for market sentiment. Third-quarter earnings are expected to be slightly better than the first half, recovering from challenges such as erratic monsoons and political uncertainties earlier in the year.”

Notably, the upcoming Union Budget 2025 and the RBI MPC meeting will also set tone for the upcoming trading sessions.

Global outlook will also play a key role in deciding India’s market sentiment. While the dollar index reached 109, US bond yield surged to 4.62%. Keeping the bleak macroeconomic outlook in mind, FII outflows are likely to continue

Uncertainty surrounding Federal Reserve’s rate cutting measures, President-elect Trump’s inflationary policies, and surge in crude oil prices might lead to heightened volatility.

Prashanth Tapse, Senior VP (Research), Mehta Equities said, “Traders should watch how Trump’s actions post-inauguration influence market trends, with Nifty’s direction hinging on these developments.”

Shares of Apollo Hospitals, Titan Company, Bajaj Finance, TCS among many were the top gainers, while Tata Steel, Kotak Mahindra, Coal India, BPCL are having a tough day.

Shares of Dabur India fell by 3.32% at ₹507.45 after reporting its Q3 numbers. The company said, “In Q3, inflationary pressures were witnessed in some segments which were partially mitigated through tactical price increases and cost-efficiency initiatives. We anticipate flattish operating profit growth in Q3.”