Why Did the BSE Sensex Experience a Drop? Insights into Market Trends

Market Overview

Mumbai: The BSE Sensex benchmark faced a decline of 271 points on Monday, marking its second consecutive day of losses. This downturn was attributed to a sell-off in IT stocks and a negative trend in global markets following a rating downgrade of the US by Moody's Ratings.

The 30-share BSE index fell by 271.17 points, or 0.33%, closing at 82,059.42. At one point during the day, it had dropped by 366.02 points, reaching a low of 81,964.57.

Similarly, the NSE Nifty index decreased by 74.35 points, or 0.30%, settling at 24,945.45.

Among the companies listed on the Sensex, notable laggards included Eternal, Infosys, Tata Consultancy Services, Tech Mahindra, Reliance Industries, Asian Paints, HCL Tech, and Adani Ports.

Conversely, Power Grid, Bajaj Finance, NTPC, State Bank of India, and IndusInd Bank saw gains.

According to Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd, the markets remained in negative territory for most of the trading session due to weak performances from Asian and European indices, prompting investors to take profits in IT, capital goods, and oil & gas sectors.

In the Asian markets, South Korea's Kospi, Japan's Nikkei 225, and Hong Kong's Hang Seng all closed lower, while Shanghai's SSE Composite index managed to finish higher.

European markets were also trading downwards, although US markets had a positive close on Friday.

The global oil benchmark, Brent crude, saw a slight decrease of 0.41%, priced at USD 65.14 per barrel.

Foreign Institutional Investors (FIIs) purchased equities worth Rs 8,831.05 crore on Friday, as per exchange data.

On the previous Friday, the Sensex had dropped by 200.15 points, or 0.24%, closing at 82,330.59, while the Nifty fell by 42.30 points, or 0.17%, to 25,019.80.