Heavy sell-off in IT stocks and investor caution ahead of RBI policy meeting drags Sensex down by over 800 points.
Mumbai | The Indian stock market experienced a significant downturn on Wednesday. Under heavy selling pressure in IT stocks, the Bombay Stock Exchange (BSE) Sensex crashed by more than 800 points, while the National Stock Exchange (NSE) Nifty also tumbled by over 200 points.
The market started the day on a weak note. The Sensex opened at 74,507, down 142 points. However, the selling pressure intensified shortly after, and by 9:45 AM, it was trading at 73,825, down by 820 points (1.10%).
Bears completely dominated today's trading session. Out of the 30 stocks in the Sensex pack, 26 were trading in the red, with only 4 showing minor gains. Similarly, the Nifty fell by 211 points (0.91%) to 23,281.
IT stocks were the main culprits behind today's massive fall. After Tuesday's rally, these stocks witnessed intense profit-booking. The Nifty IT index plunged by as much as 3.69%.
The steepest fall was seen in TCS shares, which dropped by 5.93%. Additionally, Tech Mahindra fell by 3.35%, Infosys by 2.93%, and HCL Tech by 2.79%. Other losing stocks included ITC, SBI, Bajaj Finserv, and Axis Bank.
Several domestic and global factors are responsible for this heavy market decline. Investor sentiment remains weak, leading them to pull money out of the market.
Investors are keenly watching the Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) meeting, scheduled from June 3 to 5. Amid a falling rupee and a rising trade deficit, the RBI's decisions will set the future course for the market.
Market experts believe, "This fall is a combined effect of profit-booking and investor caution ahead of the RBI meeting. Volatility may persist in the market for the next few sessions."
Furthermore, continuous selling by foreign investors and news of tensions between the US and Iran have also added to the market pressure.
Today's decline was not limited to the IT sector; selling pressure was evident across all sectors. The Nifty PSU Bank was down 1.10%, Media by 1.25%, Pharma by 0.48%, and FMCG by 0.91%. The Realty and Auto sectors also registered losses.
Overall, the market sentiment was unilaterally bearish. Investors are advised to exercise caution given the current volatility and await the outcome of the RBI's policy meeting.
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