After a five day rally and a marginal decline, the Indian stock market saw a steep fall on Wednesday after the benchmark Sensex tanked by over 1300 points, while Nifty 50 fell below the 22,000 points mark. This comes just days after the stock market hit its all-time high this week.

Sensex and Nifty saw a steep decline on Wednesday (ANI Photo)

Stock market saw a major dip when the 30-share BSE Sensex fell 1,371.23 points to 71,757.54 during the early trade hours on January 17, while Nifty fell below its record-shattering 22,000 mark, declining by 395.35 points to 21,636.95.

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With stock market declining steeply on Wednesday, the top gainers on NSE Nifty were SBI Life Insurance and HCL Technologies. However, HDFC Bank was the top laggard of today, as its shares fell by over 7 per cent.

This comes just a day after the HDFC Bank quarterly results for December 2023 were released, showing stagnant margins for the company. Axis Bank, Tata Steel, Kotak Mahindra Bank, ICICI Bank, Tata Motors, and Bajaj Finance were among the other laggards on the stock market.

Here are some reasons as the why the stock market witnessed a steep decline today.

HDFC Bank Q3 results

The biggest culprit of the market fall on Wednesday is the December quarter result for HDFC Bank, contributing to a decline of 700 points on Sensex. The HDFC Bank results were disappointing for shareholders, with a rising concern regarding valuation multiples in the future. Other banks like SBI, ICICI, Kotak Mahindra and Axis Bank also contributed to the Sensex fall.

Rupee falls against US dollar

The Indian rupee witnessed a 3 paise fall against the US dollar on Wednesday, recorded at 83.15, causing little impact on the stock market of India. This is due to the strength of the US dollar in the current market scenario, and the volatility of the domestic equity markets.

China GDP impact

China saw a stunted GDP growth for the December quarter when compared with the predictions made by Reuters. Further, the recent unemployment data released by the Chinese government made a deep impact on markets across Hong Kong, Korea and Taiwan, all seeing a major drop. This also had an impact on the Indian markets.

“Market is likely to turn slightly weak in the near-term, getting impacted by some negative global and domestic cues. The global negativity will come from the rising bond yields in the US (the 10-year yield is at 4.04 per cent) responding to concerns that the sharp rate cuts expected from the Fed this year may not materialise,” V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, told PTI.



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