Indian equity markets faced a sharp sell-off on Thursday, November 28, as the Sensex plunged 1,000 points and the Nifty dropped 1.35%.
Weakness in IT and auto stocks, along with global macroeconomic concerns, weighed heavily on investor sentiment.
The combination of a stronger US dollar, subdued global growth outlook, and technical resistance levels contributed to the downtrend.
At market close, the BSE Sensex ended at 79,139, down by 1,094 points or 1.36%.
The NSE Nifty was at 23,947, losing 327 points and falling below the crucial 24,000 mark.
IT and auto stocks lead declines
The IT and auto sectors were the biggest drags on the market.
The Nifty IT index slipped 2.3%, with major players like Infosys (-3.5%), Tech Mahindra (-2.5%), HCL Tech (-2.7%), and TCS (-1.9%) leading the losses.
Weak US inflation data signaled a slower-than-expected trajectory for rate cuts, raising concerns over reduced client spending for IT firms heavily dependent on US markets.
The auto sector also struggled, with Mahindra & Mahindra declining 3.3% and Eicher Motors falling 2.2%.
This downturn reflects broader concerns about consumer demand and global trade uncertainties.
Global macroeconomic trends added to the bearish sentiment.
The stronger US dollar, buoyed by expectations of tighter monetary policies, has reduced the appeal of emerging-market assets like Indian equities.
Asian markets mirrored the pressure, with a mix of losses and muted gains following the dollar’s surge.
The Nifty faced stiff resistance at the 24,320-24,350 levels, aligning with its 100-day exponential moving average (EMA).
Foreign institutional investors (FIIs) remain cautious amid global headwinds, further exacerbating market volatility.
Despite the sell-off, valuations are becoming more reasonable.
The Nifty’s price-to-earnings ratio has moderated to 21x from a high of 25.8x in October.
European and US market updates
Meanwhile, European markets opened higher, supported by gains in technology stocks and easing concerns over semiconductor curbs.
France’s CAC 40 and the pan-European Stoxx 600 rose by 0.59% and 0.52%, respectively.
US markets were closed for Thanksgiving, with investors digesting the impact of lighter trading and mixed economic data.
Dutch chipmakers ASML, Besi, and ASM International saw significant gains in morning trading after Bloomberg reported that potential US restrictions on semiconductor equipment and AI memory chip exports to China may be less severe than initially anticipated.
Shares of Remy Cointreau surged over 6%, rebounding from a weak opening after the French spirits maker reported a smaller-than-expected drop in operating profit for the first half. Despite the gains, the company projected a 15% to 18% decline in full-year sales, with Citi analysts describing the outlook as “significantly worse than expected.”
Key data releases scheduled for Thursday include Spanish and German inflation figures, European economic sentiment indices, and business confidence data from Italy and Spain.
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