The Sensex and Nifty indices experienced a significant drop for the second consecutive session today, as global markets reacted to heightened fears of a potential recession in the US. Investor wealth took a substantial hit, declining by ₹17.03 lakh crore, which reduced the overall market valuation to ₹440.13 lakh crore from ₹457.16 lakh crore.
The Sensex fell sharply by 2,037 points, settling at 78,944, while the Nifty dropped 661 points to 24,056 during late morning trading. This downward trend was largely influenced by major Sensex constituents such as Tata Motors, Adani Ports, Mahindra & Mahindra (M&M), State Bank of India (SBI), JSW Steel, and Titan, all of which saw declines of up to 5.04%. Out of the 30 Sensex stocks, 28 were trading in the red, reflecting a widespread negative sentiment.
The Nifty index mirrored this decline, with 46 stocks trading lower, including Tata Motors, Hindalco, ONGC, Shriram Finance, and JSW Steel, which saw losses of up to 4.37%. On the other hand, the BSE saw 88 stocks hitting their 52-week highs, while 42 stocks reached their 52-week lows, indicating a volatile trading environment.
Market breadth was notably negative, with 2,891 stocks trading in the red out of a total of 3,421, compared to just 394 stocks in the green. Furthermore, the market saw 103 stocks hitting their higher circuit limits, while 197 stocks hit their lower circuit limits, underscoring the weak market sentiment.
Foreign institutional investors (FIIs) were net sellers of ₹3,310 crore worth of equities on Friday, exacerbating the market downturn, while domestic investors purchased ₹2,965.94 crore worth of shares. The previous trading session closed with the Nifty down by 293 points at 24,717 and the Sensex losing 886 points to 80,982.
The turmoil in Indian markets is closely tied to the deteriorating economic outlook in the US, where recent data has heightened recession concerns. Key indicators showed a rise in jobless claims to 249,000, exceeding estimates of 236,000, and a drop in the ISM manufacturing index to 46.8% in July from 48.5% in June, marking an eight-month low.
These developments led to a substantial decline in US indices on Friday, with the NASDAQ Composite falling 417 points (2.43%) to 16,776, the S&P 500 decreasing by 100 points (1.84%) to 5,346, and the Dow Jones Industrial Average plunging 610 points (1.51%) to 39,737.
The adverse sentiment from the US markets has had a ripple effect globally, impacting Asian and European markets. In Asia, Japan’s Nikkei plunged 2,747 points to 33,162, the Hang Seng slipped 36 points to 16,908, Taiwan’s Weighted Index tumbled 1,584 points to 20,044, and South Korea’s Kospi fell 182 points to 2,494.
In Europe, the FTSE dropped 108 points to 8,174, France’s CAC fell 119 points to 7,251, and Germany’s DAX closed 421 points lower at 17,661. The global market decline highlights the interconnected nature of economic conditions and investor sentiment across major financial markets.