Nifty 50 tumbles 1.34%, largest intraday drop since March 2023 – key reasons
LTI Mindtree being the biggest loser, experiencing a nearly 4% decline. It was followed by Adani Enterprises, Hindalco Industries, Adani Ports & SEZ, UPL, JSW Steel, Tata Steel, TCS, Tata Motors, IndusInd Bank, HDFC Life Insurance Company, Grasim Industries, Wipro, and Coal India, all recording losses ranging from 2% to 3.6%. In 2023, the Nifty 50 has suffered a decline of over 1% on more than 11 occasions, with January 2023 having the most instances of such fall.
According to analysts, the sharp drop in today's trade was attributed to several factors exerting downward pressure on investor sentiment. One key driver of this market turmoil was the escalating yields of US government bonds, which sparked concerns among investors. Vinod Nair, Head of Research at Geojit Financial Services, said, "Despite the healthy performance of private banks and marginal reductions in oil prices, investor confidence remained pessimistic, and a widespread consolidation persisted in the domestic markets.
The global markets echoed the same trend, as the unrest in West Asia has the potential to spiral further. Increased apprehensions surrounding prolonged elevated interest rates fueled a continued upward movement in the US 10-year yield. "Amid worries over moderation in growth on account of elevated interest rates and higher energy prices, heightened risk aversion was witnessed in the Indian mid- & small-cap space, banks, metals, and energy stocks.
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