SENSEX plunges over 500 pts, NIFTY50 slips below 25,350: geopolitical uncertainty, mixed FII activities among key factors

The Indian Benchmark indices were trading under pressure in the noon session on Friday, February 27, as investor sentiment remained sour amid geopolitical uncertainty, a weak US market, a broad-based sell-off, and mixed FII activities.

Both the SENSEX and NIFTY50 crashed to their respective one-week lows, with SENSEX dropping as many as 659.4 points to a low of 81,589.21, and NIFTY50 touching a trough of 25,268.70.

At 2:09 pm, the S&P BSE SENSEX dropped by 505.25 points, or 0.61%, to 81,743.36, while NSE’s NIFTY50 was trading at 25,320.15, reflecting a 176.40 points, or 0.69% decline.

The market breadth remained on the weaker side. Of the 3,146 stocks trading on the NSE in the noon session, 1,819 declined, while 1,224 shares advanced. Meanwhile, just 52 equities touched their 52-week highs, in comparison to 217 reaching their one-year lows.

Here are the key factors behind the fall in the market

The third round of the high-stakes Iran-US nuclear talks concluded in Geneva on Thursday. While the round concluded without a deal, mediators from Iran said that significant progress was achieved, according to media reports.

Both sides will continue to hold follow-up meetings in Vienna. However, uncertainty regarding the US’s next move continues to confound investors.

The US wants Iran to give up its nuclear programme, but Iran has adamantly refused, and denied it is trying to develop an atomic weapon.

Globally, West Texas Intermediate crude oil was trading 0.38% higher at $65.45 per barrel, while Brent Crude rose 0.21% to $70.90 per barrel in New York.

This comes as the nuclear talks between Iran and the US ended without a deal.

A surge in crude oil prices is a negative for India’s macroeconomic fundamentals, as the country imports 90% of its crude requirements. This means rising crude prices could lead to an increase in India’s import bill, as per analysts.

The US market closed in the negative on Thursday, with the S&P 500 losing 0.5%, dragged by selling in shares of Nvidia. Traders were also on the lookout for inflation data, which will be released later today.

The tech-heavy Nasdaq ended 1.21% lower, respectively, with tech earnings weighing on investor sentiment. However, the 30-stock Dow Jones Industrial Average ended flat with a positive bias, up by 17 points.

Back home, selling pressure was visible across sectors, with the NIFTY Capital Market index and NIFTY Realty falling 1.8%. NIFTY Auto, FMCG, Metal, Pharma, Private Bank, and more fell approximately 1%. Only NIFTY IT (0.66%) and Media (0.76%) were trading with gains.

Broader markets also witnessed selling pressure as the NIFTY Midcap 100 index dropped 0.86%, the NIFTY Smallcap 100 index plunged 0.70%, the NIFTY 500 index dropped 0.69%, and the NIFTY Next50 index fell 0.66%.

The foreign institutional investors (FIIs) activity has been mixed in February.

While FIIs sold shares worth ₹3,465.99 crore on Thursday, they bought equities worth ₹2,991.64 crore on Wednesday.

On the other hand, the domestic institutional investors (DIIs) purchased equities worth ₹5,031.57 crore and ₹5,118.57 crore on a net basis on February 26 and February 25, respectively, according to exchange data.

The top losers in the NIFTY50 index were Bharti Airtel (-2.68%), Dr. Reddy's Laboratories (-2.66%), Grasim Industries (-2.38%), InterGlobe Aviation (-2.11%) and Nestle India (-2.06%).

On the flipside, the top gainers included Eternal (1.40%), Infosys (1.37%), HCL Technologies (1.31%), Trent (1.30%) and Apollo Hospitals Enterprise (0.71%).