NIFTY50 & SENSEX record sharpest single-day decline since June 4, India VIX hits one-month high

It's a sea of red for the Indian markets. After opening the session at a fresh all-time high on Wednesday, the Indian equity benchmark indices SENSEX and NIFTY50 plummeted about 0.80% each. This marks the sharpest single-day fall for the NIFTY50 index since June 4, when Lok Sabha Elections 2024 results were announced.

The significant drop in the equity benchmark indices can be attributed to a surge in the India VIX, which has risen by about 2%, reaching a one-month high.

Further, notable declines in the Nifty Auto and Nifty Bank indices have dented market sentiment. Adding to the uncertainty were the cautious remarks of Federal Reserve Chair Jerome Powell to the U.S Congress, offering little hint on the timing of interest rate cuts in the world's largest economy. Powell stated that he did not want "to be sending any signals about the timing of any future actions" on interest rates.

Additionally, a SEBI committee is set to evaluate F&O Expert Panel recommendations on volatility and leverage, with a meeting schedule on July 15.

The broader markets also witnessed a sell-off with Nifty Midcap 100 and Smallcap 100 indices declining by 0.76% and 0.89%, respectively. The drastic fall in the broader markets resulted in a advance-decline ratio favoring declines, with 1,770 stocks declining compared to 525 stocks advancing in today's trade.

All sectoral indices also traded in red on Wednesday. Top three losers were Nifty Auto (2.19%), Nifty Media (-1.56%) and Nifty Metal (-1.49%).