Sensex Today Tanks 2,222 Points | Nifty Ends Below 24,100 | 4 Reasons Why Indian Share Market is Falling

Mon, 5 Aug Closing

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After opening the negative note, Indian share markets Slipped further as the session progressed and ended the day weak.

Indian bourses retreated heavily on Monday tracking losses in the global peers. The Sensex plunged to a low of 78,296, and the Nifty hit a low of 23,894.

At the closing bell, the BSE Sensex stood lower by 2,222 points (down 2.7%).

Meanwhile, the NSE Nifty closed lower by 662 points (down 2.7%).

HUL, Nestle and HDFC Life were among the top gainers today.

Tata Motors, Adani ports and Tata Steel on the other hand, were among the top losers today.

For a comprehensive overview of key players in the financial sector, check out list of Fin Nifty Companies.

The GIFT Nifty ended at 24,098 down by 617 points.

For impact of the Bank Nifty companies and comprehensive overview of the index, check out Equitymaster's Bank Nifty Companies list.

Broader markets ended the day negative. The BSE Mid Cap ended 3.6% lower and the BSE Small Cap index ended 4.2% lower.

Sectoral indices are trading on negative note with stocks in metal sector, realty sector, power sector and oil & gas sector witnessing buying most selling pressure.

Shares of Suzlon energy, Sun Pharma and PCBL hit their respective 52-week highs today.

Now track the biggest movers of the stock market using stocks to watch today section. This should help you keep updated with the latest developments...

The rupee is trading at 83.85 against the US$.

Gold prices for the latest contract on MCX are trading 0.1% lower at Rs 69,696 per 10 grams.

Meanwhile, silver prices are trading 2.1% lower at Rs 80,726 per 1 kg.

Here are four reasons why Indian Markets are falling today

#1 US Recession Fears

Fears of a looming recession in the US have given a severe jolt to the risk appetite of investors globally after July payroll data last Friday showed the US unemployment rate jumped to near a three-year high of 4.3% last month against 4.1% in June. July marked the fourth consecutive monthly increase in the unemployment rate.

#2 Geopolitical Tension

According to media reports, Iran has vowed to take revenge after Israel killed Hamas political chief Ismail Haniyeh. Haniyeh was killed when he was in Iran to attend the inauguration of newly elected Iranian President Masoud Pezeshkian.

#3 Stretched Valuations

The Indian stock market's current valuation is stretched and experts say the market is ripe for a healthy correction.

Valuations in India, driven mainly by sustained liquidity flows, continue to be high, particularly in the mid and small-cap segments. The overvalued segments of the market, like defence and railways, are likely to come under pressure. The buy-on-dips strategy, which has worked well in this bull run, is likely to be threatened now.

#4 Unimpressive Q1 Results

India Inc.'s June quarter (Q1FY25) result has been mixed and failed to cheer market sentiment. As the current market valuation remains high, experts fear the earnings may not be able to sustain it.

The rally in the recent past has been supported by earnings growth, but experts see some moderation in the earnings of several sectors, which has potentially triggered some profit booking in the market.

Speaking of the stock market, Indian Pharma companies have been at the receiving end of increased enquiries from the US pharma companies that could potentially be a big business opportunity.

Richa Shah, Research Analyst at Equitymaster in her latest video talks about why biosecurity Act could be a potential shot in the arm for pharma stocks

Tune into below video for more details.

Marico Q1 Results

In news from the FMCG sector, Marico Ltd on August 5 reported a consolidated net profit of Rs 4.6 bn for the June quarter of FY25, registering a growth of 9% from Rs 4.3 bn in the same quarter of the previous financial year.

The total revenue of the company is Rs 26.4 bn, an increase of 6.7% from Rs 24.8 bn in the year-ago quarter, the company said in a regulatory filing.

Earnings before interest, tax, depreciation and amortization (EBITDA) margin stood at 23.7%, up 0.5% YoY and EBITDA grew by 9%.

Marico reported that copra prices remained stable as anticipated, while edible oil and crude oil derivatives stayed within a predictable range.

Given the slight upward trend in forecasts for edible and crude oils, the company plans to use its pricing power strategically across key brands to manage input cost pressures throughout the year.

Domestic volume growth increased by 4%, with domestic revenue growth expected to rise further as both pricing and volume growth continue to improve. The company will also pursue aggressive diversification strategies.

In the Parachute Rigids segment, Marico achieved a 2% volume growth. Notably, the composite coconut oil portfolio, including flanker brands, reached an all-time high market share of approximately 64% on a moving annual total (MAT) basis.

Value-added hair oils declined 5% in value terms amidst persistent sluggishness and competitive headwinds in the bottom of the pyramid segment.

Saffola edible oils delivered mid-single-digit volume growth as input and consumer pricing remained stable.

Foods posted robust 37% value growth YoY. Saffola Oats delivered more than 20% growth.

Why Ashoka Buildcon Share Price is Falling

Moving on to news from the construction sector, Shares of Ashoka Buidcon Limited tanked 5% to Rs 240 in morning trade on August 5 despite being the lowest bidder for two projects of the Mumbai Metropolitan Region Development Authority (MMRDA) for around Rs 12.8 bn.

This comes after the market crashed, plunging almost 3%, as global cues and recessionary fears dented sentiment.

The first project involves designing and constructing a creek bridge from Kolshet to Kalher, valued at Rs 2.9 bn, with a completion timeline of 42 months. The second project, worth Rs 9.9 bn, will see the construction of a creek bridge from Gaimukh to Payegaon, expected to be completed in 36 months.

Both contracts are for engineering, procurement, and construction (EPC) work. Ashoka Buildcon operates in the construction and infrastructure facilities sector, utilizing both EPC and build-operate-transfer (BOT) models.

This is the second such order in quick succession. In June, the company was the lowest bidder for two projects worth Rs 21.5 bn from the Maharashtra State Road Development Corporation.

The first project involves constructing a major bridge across Jaigad Creek, between Tawsal and Jaigad on the Revas-Reddi Coastal Highway in Maharashtra's Ratnagiri district.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

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