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The Indian stock market experienced a downturn on September 4, driven by weak US economic data that fueled global selling pressure. The Sensex and Nifty 50 indices both opened significantly lower and remained in negative territory around noon. Tepid US manufacturing data sparked concerns about a potential slowdown in the world's largest economy, further contributing to the market's decline. While initially all 13 sectoral indices were in the red, Nifty Healthcare and Nifty Pharma managed to recover some of their losses by midday. Investors sought refuge in defensive sectors amidst the broader market weakness, indicating a shift towards sectors perceived as more resilient to economic downturns.
At 12 PM, the Sensex had shed 391 points, or 0.5 percent, to settle at 82,163, while the Nifty had dropped 144 points, or 0.6 percent, to reach 25,135. The broader market exhibited a mixed trend, with the midcap index down 0.5 percent, while the smallcap index edged up 0.2 percent. The market's focus shifted to the upcoming release of US job openings data, scheduled for later in the day. The jobless claims report, due on September 5, and the US payrolls report, slated for September 6, were also keenly anticipated. These reports hold significant weight, as they will influence the Federal Reserve's decision on the magnitude of an interest rate cut.
The sectoral trend revealed a divergence, with 11 out of 13 indices trading in the red. Nifty Healthcare and Nifty Pharma outperformed, surging over 2 percent each, while Nifty Metal, Nifty PSU Bank, and Nifty IT faced the heaviest losses, declining between 1 and 1.6 percent. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, highlighted the historical weakness of global markets in September, particularly over the last four years. Based on early trends, he suggested that this pattern might repeat itself this year. Regarding the sell-off in US markets on September 2, Vijayakumar noted indications of US manufacturing moving into contraction, potentially jeopardizing the expectation of a soft landing for the US economy, a crucial pillar of support for both US and global markets. He cautioned investors about the absence of valuation comfort in the broader market and advised long-term investors to prioritize quality large-cap stocks, which offer a greater sense of safety.
Hardik Matalia, Derivative Analyst at Choice Broking, provided a technical outlook on the Nifty 50. He anticipated support levels at 25,050, followed by 25,000 and 24,950. On the upside, he identified 25,300 as an immediate resistance level, with further resistance at 25,350 and 25,400. Notably, Exicom Tele Systems shares plummeted 4.5 percent a day after Big Bull Rakesh Jhunjhunwala's RARE Enterprise trimmed its stake in the company. The entity sold 15.85 lakh shares, representing a 1.3 percent stake, for an average price of Rs 348.60, resulting in a total stake sale value of Rs 55.25 crore. Conversely, Rama Steel Tubes shares soared 13 percent after the company announced a strategic collaboration with Onix Renewable.
Source: Mid-day Mood | Sensex, Nifty remain in red on US growth worries; pharma, healthcare indices recover