Analysts’ take: Why Sensex tanked over 500 points today

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Benchmark equity indices BSE Sensex and NSE Nifty cracked over 1% on Monday following weak global cues and reports of Indo-China border tension. The 30-share Sensex closed 530.95 points down at 48347.59, while the 50-share Nifty index settled 133 points down at 14,238.90.

With a fall of 5.36 per cent, energy-to-telecom behemoth Reliance Industries emerged as top losers in the BSE Sensex pack. It was followed by IndusInd Bank (down 4.72 per cent), HCL Technologies (down 3.80 per cent) and Asian Paints (down 3.17 per cent). On the other hand, Axis Bank, Sun Pharma and Bajaj Auto gained up to 2.19 per cent.

Among the sectoral indices on the BSE, the Energy index declined the most 4.44 per cent. Oil & Gas, Power, Information Technology, Utilities and Consumer Discretionary Goods also cracked over 1 per cent. However, BSE Healthcare and Metal indices gained 0.93 per cent and 0.19 per cent, respectively.

Here’s what experts have to say:

Vinod Nair, Head of Research at Geojit Financial Services Indian markets witnessed a highly volatile trade and closed in red due to weak global market and reports of Indo-China border tension. The downside was equally contributed by all the sectors except pharma which traded in the green. Policy decisions of the US Fed meeting which will commence tomorrow will drive the global market in the coming days. We have seen Indian markets being highly volatile these days and this trend is expected to continue this week as we inch closer to the Union Budget.

Deepak Jasani, head of retail research, HDFC Securities

Nifty has fallen for the third consecutive session. This has happened after about 4 months. Poor advance-decline ratio hints at broader profit-taking. Pre Budget nervousness has resulted in some unloading. Locking up of large sums in the recent IPOs have also led to this sell-off. 14123-14148 is the next support band for the Nifty.

S Ranganathan, Head of Research, LKP Securities

A volatile session of trade today which saw selling in heavyweights despite strength seen in pockets like two-wheelers and pharmaceuticals. Event-specific price action was seen in paint sector stocks while tyre stocks succumbed to profit-booking.