Stocks market today: Sensex, Nifty 50 crash 1% each; what is driving the market down? Explained with 5 factors | Stock Market News

Stock market today: Indian stock market benchmarks- the Sensex and the Nifty 50- plunged by a per cent each in morning trade on Thursday, November 21, amid weak global cues.

The domestic market witnessed a broad selloff as mid and small-cap segments also suffered losses.

The overall market capitalisation (m-cap) of BSE-listed firms dropped to nearly ₹425 lakh crore from about ₹431 lakh crore in the previous session, making investors poorer by about ₹6 lakh crore in a single session.

The Sensex opened at 77,711.11 against its previous close of 77,578.38 and dropped 1 per cent to the level of 76,802.73. On the other hand, the Nifty 50 opened at 23,488.45 against its previous close of 23,518.50 and fell over a per cent to 23,263.15.

Around 11:20 am, the Sensex and the Nifty 50 were down 0.7 per cent and 0.8 per cent, respectively.

5 key factors driving the market down

Both key indices had clocked modest gains in the previous session on Tuesday. However, they resumed their downward march on Thursday on lingering concerns over weak earnings, geopolitical tensions, and stretched valuation. The US indictment of Adani Group Chairman Gautam Adani and other senior executives on bribery charges dealt a fresh blow to sentiment.

Let’s take a look at the key factors behind the market selloff.

1. The Adani saga

Several Adani Group shares hit their lower circuits in early trade on Thursday after Gautam Adani was indicted in New York over his role in an alleged multibillion-dollar bribery and fraud scheme.

According to US authorities, more than $250 million in bribes were promised to Indian Government officials to secure solar energy contracts. Shares of Adani Enterprises and Adani Ports plunged 23 per cent each on BSE. Both stocks were top losers in the Nifty 50 index around 11:30 am. 

2. Concerns over weak Q2 earnings

Q2 earnings came out significantly weak. The July-September quarter numbers of the majority of companies disappointed markets.

As a Mint report highlighted, the combined revenue of the 2,996 BSE-listed companies that were part of the analysis rose 8.1 per cent year-on-year (y-o-y), slower than 9.5 per cent in Q1. As a result, net profit growth slowed to 8.9 per cent from 9 per cent. The banking, financial services, and insurance (BFSI) sector was again a saving grace: without it, revenue growth decelerated to 4.6 per cent from 6.3 per cent, and net profit growth edged up from 3.3 per cent to a still-dismal 4.4 per cent.

“Global cyclicals, such as oil and gas, along with metals, cement, chemicals, and consumers, weighed on earnings growth. Consumption has emerged as a weak spot, while select segments of BFSI are experiencing asset-quality stress. Weakness in government spending has also been one of the factors driving moderation in earnings,” Sneha Poddar, VP of research and wealth management at Motilal Oswal Financial Services, observed.

3. Escalating geopolitical tensions

Fresh escalation in the Russia-Ukraine war has soured the market mood further. Russian President Vladimir Putin signed a revised nuclear doctrine on Tuesday, days after the US allowed Ukrainian use of longer-range missiles against Moscow.

“The escalation of tensions in the Ukraine-Russia war can weigh on markets. The element of uncertainty caused by the escalations is high, and therefore, most market participants are likely to be in a wait-and-watch mode. However, any sharp slide in the market appears unlikely since the mother market, the US, has largely downplayed the escalation,” said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

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