Sensex falls by 400 points on weak global trends, waning rate cut hopes; snaps 2-day rally

Snapping the two-day rally, benchmark indices Sensex and Nifty closed lower on Friday mainly due to weak global trends and fading hopes of a rate cut by the US Federal Reserve in December.

The 30-share BSE Sensex declined 400.76 points or 0.47 per cent to settle at 85,231.92. During the day, it tanked 444.84 points or 0.51 per cent to 85,187.84.

The 50-share NSE Nifty dropped 124 points or 0.47 per cent to 26,068.15. The index had rallied over 1 per cent or 282 points to trade above 26,000 in the previous two sessions.

Among Sensex firms, Tata Steel, HCL Tech, Bajaj Finance, Bajaj Finserv, Bharat Electronics and Eternal were the major laggards.

However, Maruti, Mahindra & Mahindra, Tata Motors Passenger Vehicles and ITC were among the gainers.

Analysts said better-than-expected US non-farm payroll data dampened expectations of a December rate cut by the US Federal Reserve. Worries about a bubble in AI-related shares also dampened investor sentiment across global markets.

Asian markets ended sharply lower. South Korea’s Kospi tanked 3.79 per cent, Shanghai’s SSE Composite Index lost 2.45 per cent, Japan’s Nikkei 225 index dropped 2.40 per cent Hong Kong’s Hang Seng Index fell by 2.38 per cent.

European markets were trading in the red. US markets ended in negative territory on Thursday. The Nasdaq Composite tanked 2.15 per cent, S&P 500 declined 1.56 per cent, and Dow Jones Industrial Average fell 0.84 per cent.

“Indian markets turned volatile and settled lower, reflecting the broader decline seen across Asian equities after better-than-expected US non-farm payroll data dampened the expectation of a December rate cut. Profit-booking after a brief two-day uptrend added to the cautious tone, pulling all key indices into the red, with mid and smallcaps facing sharper corrections,” Vinod Nair, Head of Research, Geojit Investments Limited, said.

The BSE smallcap and midcap indices declined 1.30 per cent each.

All sectoral indices ended lower. Metal dropped 2.35 per cent, followed by realty (1.89 per cent), capital goods (1.79 per cent), commodities (1.46 per cent) and industrials (1.43 per cent).

A total of 2,898 stocks declined while 1,278 advanced and 162 remained unchanged on the BSE.

On the weekly front, the BSE benchmark jumped 669.14 points or 0.79 per cent, and the Nifty went up by 158.1 points or 0.61 per cent.

Foreign Institutional Investors (FIIs) bought equities worth Rs 283.65 crore on Thursday, according to exchange data. Domestic Institutional Investors (DIIs) also bought stocks worth Rs 824.46 crore.

Brent crude, the global oil benchmark, dropped 1.51 per cent to USD 62.42 per barrel.

On Thursday, the Sensex jumped 446.21 points or 0.52 per cent to settle at 85,632.68. During the day, it surged 615.23 points or 0.72 per cent to hit a 52-week high of 85,801.70. The Nifty also hit its 52-week high of 26,246.65 during the day before closing at 26,192.15, reflecting a gain of 139.50 points or 0.54 per cent.