Stock Market Closes Lower Amid Geopolitical Tensions: Sensex and Nifty Slide

Stock Market Closes Lower Amid Geopolitical Tensions: Sensex and Nifty Slide

VoM News Desk | January 3, 2024 | 07:08 PM IST | Breaking News | Follow on Google News

Stock Market Closes Lower Amid Geopolitical Tensions: Sensex and Nifty Slide

Stock Market Closes Lower Amid Geopolitical Tensions: Sensex and Nifty Slide

On Wednesday, both the Sensex and Nifty 50 wrapped up in the red for the second consecutive session, prompted by escalating geopolitical tensions, leading investors to cash in on high-valuation stocks. This move comes in light of fading hopes for rate cuts. The recent substantial market surges have driven valuations upwards, inducing investors to secure profits at elevated levels.

Brokerage firm Motilal Oswal Financial Services highlighted that the Nifty’s P/E (price-to-earnings ratio) is near its historical average, with P/B (price-to-book-value) exceeding its average. They reported, “The Nifty is trading at a 12-month forward P/E ratio of 19.6 times, near its LPA (long period average) of 20.2 times (3 per cent discount)…”

Amid these market fluctuations, global cues remained weak, further dampening investor sentiment. Anticipation lingered regarding the release of minutes from the US Federal Reserve’s December meeting.

The Sensex began at 71,832.62, slipping from the previous close of 71,892.48, touching an intraday high of 71,862, and a low of 71,303.97, finally concluding at 71,356.60, marking a loss of 536 points or 0.75 per cent.

Similarly, the Nifty 50 opened at 21,661.10, touched an intraday high of 21,677, a low of 21,500.35, and eventually settled at 21,517.35, down 148 points or 0.69 per cent.

While the benchmark indices dipped, mid and smallcap indices performed better, closing higher for the day.

Amidst market activities, Adani Group stocks gained attention after the Supreme Court’s decision against initiating a special investigation into allegations against the Adani Group.

The top gainers in the Nifty 50 index today were Bajaj Auto (up 4.55 per cent), Adani Enterprises (up 2.48 per cent), and Adani Ports (up 1.58 per cent). Conversely, the top laggards were Hindalco (down 3.82 per cent), JSW Steel (down 3.77 per cent), and Tata Steel (down 3.30 per cent).

Nifty IT plunged 2.52 per cent, leading among the sectoral indices, while Nifty Realty surged 1.23 per cent, and Nifty PSU Bank climbed 1.15 per cent. Nifty Bank concluded 0.12 per cent lower.

Market experts indicated that global indicators, rate insights from the upcoming Fed minutes, and high valuations influenced investor caution. The pullback in certain sectors was interpreted as an opportunity to trim equity exposure, especially with the Union Budget approaching, potentially leading to market volatility.

Jatin Gedia, Technical Research Analyst at Sharekhan by BNP Paribas, highlighted the Nifty’s resistance around the 20-hour moving average, indicating a probable support level at the 38.2 per cent Fibonacci retracement mark. He suggested viewing this dip as a potential buying opportunity rather than a trend reversal.

VoM News Desk

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