After a healthy close on September 30, domestic equity benchmarks the Sensex and the Nifty resumed their download march on October 3, beginning the month on a negative note amid weak global sentiment.
Investors booked profit across the sector in the absence of a positive trigger. Investors' risk appetite appears shattered as the concerns over a long recession due to the rate hikes refuse to fade away.
As per a Reuters report, world stocks traded at their lowest levels since late 2020 on October 3- when the global economy was still reeling from the COVID-19 pandemic.
A sharp jump in crude oil prices and the rupee's steep fall also weighed on sentiment.
Oil prices jumped more than 4% as the Organization of the Petroleum Exporting Countries and its allies said they would consider reducing output, reported Reuters.
Brent Crude traded near the $90 a barrel mark while the rupee plunged 53 paise to close at 81.88 per dollar.
Sensex opened slightly lower at 57,403.92 against the previous close of 57,426.92 and fell 744 points in intraday trade to the low of 56,683.40.
The index closed 638 points, or 1.11%, lower at 56,788.81 while the Nifty50 closed with a loss of 207 points, or 1.21%, at 16,887.35.
The BSE Midcap index fell 1.24%, in sync with the benchmark. However, the loss of the Smallcap index was comparatively small at 0.54%.
The overall market capitalisation of BSE-listed firms dropped to ₹268.3 lakh crore from ₹271.8 lakh crore on September 30, making investors poorer by ₹3.5 lakh crore in a single session.
"Global markets are expected to stay under pressure due to an unfavourable economic outlook and investor risk aversion. Global markets were in pain as economic data forecast to shed lower as indicated by high-frequency indicators in European regions like UK PMI is consequently down below 50 showing contraction in the economy," Vinod Nair, Head of Research at Geojit Financial Services pointed out.
Only four stocks, Dr Reddy's Labs (up 1.99%), Bharti Airtel (up 0.46%), NTPC (up 0.41%) and Wipro (up 0.05%) ended in the green in the Sensex index.
Shares of Maruti (down 3.16%), Hindustan Unilever (down 2.77%) and IndusInd Bank (down 2.55%) ended as the top laggards.
Among the sectors, BSE Power and Utilities fell more than 3% each. Auto, FMCG and Commodities indices lost 2% each.
"As demand slowed, India's manufacturing PMI declined slightly to 55.1 in September. As a result, all the key sectors were pressured by selling, except pharma and oil stocks," said Nair.
As per Deepak Jasani, Head of Retail Research, HDFC Securities, Nifty now has support on the downside at 16,747. A sustained move below this level could lead to accelerated falls. On up moves, the 17,094-17,114 band could offer resistance.
Nifty formed a bearish candle on the daily chart. Indicators are continuing in a negative trend, and call writing at higher strikes suggests that the road ahead will be highly volatile, Om Mehra, Technical Associate at Choice Broking pointed out.
"On the derivatives front, the highest call OI (open interest) is at 17,000 followed by 17,100 strike price while on the put side, highest OI remains at 16,500 strike price," said Mehra.
Key market data
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of MintGenie.