Sensex and Nifty once again recorded a sharp decline as markets closed on Thursday, with the BSE Sensex closing at 71,186 points and NSE Nifty closing at 21,465 points at 3:30 pm.
This is the second straight day of decline for the benchmark indexes in the Indian stock market, with the tumble triggered by the steep fall of Nifty Bank on Wednesday.
This is the first time in weeks that Nifty has dropped below the 21,500 mark, recently touching its all-time high at over 22,000 points, on January 16. Similarly, Sensex witnessed a steep drop a day after touching its lifetime high at over 73,000 points on Tuesday.
The steep drop in Sensex and Nifty was seen for the second straight day, in the same week when both indexes touched their lifetime high. On Wednesday, Sensex dropped by 1600 points while Nifty dropped by 430 points.
The most dramatic drop was witnessed by Nifty Bank index on Wednesday, witnessing a decline of over 2060 points a day after HDFC Bank released its Q3 results for December 2023.
During the opening hours on Thursday, the benchmark Sensex was down by 757.36 points, settling at 70,751.77, while the Nifty faced a decline of 279.80 points, reaching 21,292.15.
After recording a major loss in the early trading hours, both Sensex and Nifty showed gradual recovery on the stock market towards the end of the trading session today.
HDFC Bank’s ripple effect
A day after the quarterly results of HDFC Bank were posted by the company, its share prices dropped significantly. Further, the shares of other private lenders also stumbled due to its stagnant margins and low net profit for the December 2023 quarter.
Sending a ripple effect into the entire stock market, HDFC Bank shares caused Nifty Bank to tank steeply on Wednesday, further leading to the drop of Sensex and Nifty index during the early market session.
Nifty50 has taken a major hit because of the HDFC Bank quarterly report, falling more than 430 points for the first time since 2022. However, analysts have predicted that the upcoming Lok Sabha elections in the country can boost up the markets by 8-10 percent over the first quarter of the new fiscal year.