Benchmark market indices continued their weak performance for the fifth day in a row, led by sharp fall in technology and metal stocks.
The S&P BSE Sensex and NSE Nifty 50 have been losing momentum in the past few sessions as panic-stricken investors await the outcome of the two-day Federal Open Market Committee (FOMC) meeting beginning tomorrow.
Weak third quarter results, pre-budget panic and global cues are some of the factors that weighed on the sentiment in the domestic market.
Read | Sensex, Nifty fall on the fifth day, JSW Steel fell, ICICI Bank shares rose
Why did Sensex, Nifty fall drastically today?
The Sensex fell heavily in early trade on Monday and continued to decline in the afternoon trade. The 30-point index fell 1,271 points or 2.15 per cent at 1:15 pm, while the Nifty 50 was down 363 points or 2.06 per cent.
This is one of the biggest fall in the benchmark market indices in the past few weeks and experts believe that the market momentum will remain weak for the next few weeks. This is mainly due to a wave of pre-budget panic among investors and weak quarterly results.
Technology stocks were the worst hit today, with the Nifty IT index falling over 2.22 per cent. Zomato, Paytm and Nykaa were some of the tech companies that suffered sharp losses during today’s trading session.
Zomato was down about 19 per cent, while Paytm was down around 8 per cent and Nykaa was down 10 per cent at the time of publication.
Read also | Sensex, Nifty hit one-week low due to technical slowdown
Not just technology stocks, but several other firms including Vodafone Idea and JSW Steel fell.
Experts have asked investors to trade with caution and not book profits immediately. This is because there is a possibility that the market will fall further before the Union Budget for 2022-23.
In addition, the outcome of the FOMC meeting on January 26 will determine how the market will perform ahead of the Budget. Among other things, traders remain cautious even before the monthly expiration of the January derivatives contract.
Looking at all the circumstances, there may be some equilibrium in the markets on 27th January, but some nervousness is likely to dominate the market till the budget announcement on 1st February, 2022.