Sensex tanks over 900 pts from day’s high on fag-end selloff; key factors that led the fall

After opening with healthy gains, both Sensex and Nifty ended with cuts, as US futures logged heavy losses during the day.

Erasing initial gains amid a choppy session, the 30-share pack Sensex declined 460.19 points or 0.80% to close at 57,060.87. Axis Bank, Reliance, and Infosys were top index drags. The Nifty Bank index fell nearly 1 per cent.

Its broader peer, NSE Nifty50, slumped 142.50 points or 0.83% to 17,102.55.

Gains in oil and gas, capital goods, financial and metal stocks failed to hold up headline indices. Further, weakness in select IT names including Wipro, set to report Q4 earnings, after market hours limited the upside.

The market breadth was skewed in favour of the bears. About 1,472 stocks gained, 1,862 declined and 143 unchanged.

Nifty IT declines over 10% to post worst month since March 2020.

Here are the top reasons markets fell in the final hour:

US Futures fall as Big Tech retreats after earnings
US stock futures fell early Friday morning following post-earnings slumps in Amazon.com Inc. and Apple Inc.

Nasdaq Futures fell 1 per cent, while Dow Jones Industrial Average Futures were down 119 points, or 0.35 per cent. S&P 500 futures retreated by 0.71 per cent.

Stocks fizzled after a disappointing forecast from Amazon.com. The shares e-commerce giant dropped 10% in extended trading on Thursday after the company issued a revenue forecast that trailed analysts’ estimates.

Disappointing Q4 numbers
Axis Bank’s fourth quarter results were a mixed bag, with profit growth beating analysts estimates but net interest income (NII) growth, a key focus this earnings season, lagging projections. Axis Bank share price shed more than 6.5 per cent and were the biggest drags on the benchmarks to the tune of 125 points.

Shares of Maruti Suzuki ended 2.6 per cent lower even as India’s largest carmaker beat profit and revenue estimates for Q4.

Maruti Suzuki said its profit after tax (PAT) grew 57.7 per cent YoY to Rs 1,838.90 crore in the March quarter from Rs 1,166.10 crore in the corresponding quarter last year. However, the sales figure was lower than the ET NOW poll estimate of Rs 26,775 crore.

Sales volume for the quarter fell 0.7 per cent YoY to 488,830 units against 492,235 units in the same quarter last year.

Selling pressure in index-heavyweights
Profit-booking in Reliance Industries in the last few minutes of trade contributed to 87-point fall in the 30-share pack. Power Grid, State Bank of India, Titan and NTPC were among the major laggards from the Sensex pack.

Nifty forms bearish engulfing pattern
“Nifty formed a bearish engulfing pattern on the daily chart suggesting weakness in the near term. Besides, the benchmark index failed to float above 200-DMA,” said Rupak De, Senior Technical Analyst at LKP Securities.

The daily RSI has entered a bearish crossover. Going ahead, the correction may take the Nifty towards 16,800, whereas on the higher end. 16,200 may continue to act as immediate resistance, he added.

For the last couple of weeks, the index is oscillating near its key weekly moving averages and this has developed as a triangular pattern on the daily chart, said Gaurav Ratnaparkhi of Sharekhan.

Overall structure suggests that the index can continue to consolidate in the range of 17,000-17,400 and once the swing low of 16,958 is breached then the index can tumble down towards 16,600, Ratnaparkhi added.