Sensex, Nifty tumble in early trade on weak global cues

The Sensex and Nifty stock market indices experienced a significant drop in early trading on Friday, following a period of record-breaking gains and global sell-offs. This selling pressure was exacerbated by significant declines in leading stocks like Reliance and ICICI Bank. During morning trading, the 30-share BSE Sensex fell by 640.13 points to 81,227.42, while the NSE Nifty dropped by 271.40 points to 24,739.50. Both indices slumped by up to 1 percent.

Within the Sensex, companies such as Tata Motors, Maruti Suzuki India, Tata Steel, JSW Steel, Larsen & Toubro, Adani Ports, Tech Mahindra, NTPC, and Tech Mahindra recorded losses, while HDFC Bank, Hindustan Unilever, Asian Paints, Nestle India, and ITC saw gains. Market analysts expressed concerns about the sustainability of the market rally, emphasizing the need for fundamental support, rather than just influxes of capital.

They also highlighted the potential for profit booking, particularly in mid and small-cap stocks, due to high valuations. Additionally, Brent crude oil prices rose by 0.78 percent to reach USD 80.14 per barrel. In Asian markets, Tokyo, Shanghai, Hong Kong, and Seoul were also trading lower.

The US stock market ended lower on Thursday after a period of significant gains. Furthermore, foreign institutional investors bought equities worth Rs 2,089.28 crore in the capital markets on Thursday, indicating continued interest in Indian stocks. On a positive note, the Sensex climbed to a new lifetime high of 81,867.55, and the NSE Nifty settled at an all-time closing peak of 25,010.90.

Moreover, recent data showed a slight easing in India’s manufacturing sector growth in July, along with a notable increase in the selling prices of goods and services. Lastly, the government’s GST collections in July increased by 10.3 percent to over Rs 1.82 lakh crore, primarily driven by domestic transactions.