Sensex Today Tanks 930 Points | SmallCap Index Sheds 3.5% | 3 Reasons Why Indian Share Market is Falling

Wed, 20 Dec Closing

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After a gap up opening, the markets experienced heavy sell off from all time high levels and ended the day in deep red.

Indian benchmark indices ended lower after traders chose to book profits amid concerns over valuation and overbought signals.

In percentage terms, today's decline in Nifty was the biggest single-day loss since October 26. In the last one month alone, the index is up over 1,400 points or about 7.2% with November turning out to be the best month for Nifty in 2023.

At the closing bell, the BSE Sensex dipped by 930 points (down 1.3%).

Meanwhile, the NSE Nifty closed lower by 302 points (down 1.4%).

From Sensex only ONGC and Britannia were the top gainers today.

Zee Entertainment, Adani Ports and GAIL, on the other hand, were among the top losers today.

The GIFT Nifty was trading at 21,191, down by 425 points, at the time of writing.

Border indices ended on a negative note with the BSE MidCap index down by 3.1% while the BSE SmallCap index slipped by 3.4%.

All sectoral indices ended in red with stocks in the Power sector, Telecom sector, Energy  sector and Pharma sector witnessing most of the selling.

Shares of Nestle, Ultratech Cement and Grasim hit their respective 52-week highs today.

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

Asian share markets ended on a mixed note. The Shanghai Composite ended 1% lower while the Nikkei ended 1.4% in green. The Hang Seng soared 0.6%.

The rupee is trading at 83.18 against the US$.

Gold prices for the latest contract on MCX are trading in green by 0.1% at Rs 62,550 per 10 grams.

Silver for the latest contract on MCX is also trading in green by 0.1% at Rs 74,870 per 1 kg.

Here are three reasons why Indian Markets are falling today.

#1 Selling in heavyweights

Adani Ports fell over 6 per cent, while the flagship Adani Enterprises declined over 5.6 per cent; both were the top losers on the Nifty 50.

The sharp downturn has been attributed to heavy profit booking by traders looking to cash in on the stellar run seen on Dalal Street over the past few trading session.

#2 Sector Slump

All the sectoral indices declined sharply, reversing gains witnessed in early trade. Nifty Media and Nifty Metal fell sharply by over 4%, while major sectoral indices such as Nifty IT, Nifty Bank, Nifty Financial Services fell sharply by 2%, 1.4% and 1.5% respectively.

#3 Rising Covid Cases

The rising cases of Covid sub-variant JN.1 in India is also drawing the attention of market participants. Kerala reported 292 new active cases of COVID-19 and 3 deaths yesterday.

Earlier in the day, Union Health Minister Mansukh Mandaviya reviewed the preparedness of health facilities and stressed on being alert against emerging strains of coronavirus. However, the pharma index also fell over 1%, dragging market sentiments lower

Speaking of the stock market, in as many as 92 years, only 4% of all listed equities in the US accounted for all the wealth created there.

Now since we are referring to the American stock markets, we cannot blame the underperformance of 96% stocks on the lack of maturity of the markets.

Nor can we attribute any economic or geopolitical risk as the cause. This is because the performance has been gauged over nearly a century.

Does this apply to Indian stock markets too?

Tanushree Banerjee, co-head of research at Equitymaster, answers this question in the video below.

DOMS Industries IPO Strong Debut

In the news, on Wednesday, 20 December 2023, the stationary and art manufacturing company DOMS Industries made its stock market debut.

The share opened at Rs 1,400 against the issue price of Rs 790, recording a listing gain of 77.2%.

The IPO had garnered substantial interest from investors, as reflected in the subscription numbers. It was oversubscribed 93.5 times, with retail investors, high net-worth individuals (HNIs), and qualified institutional buyers (QIBs) all showing strong participation.

In the anchor book, institutional investors, including Abu Dhabi Investment Authority, Fidelity Funds, Goldman Sachs, SBI Mutual Fund, HDFC Mutual Fund, among others collectively invested Rs 5.4 billion (bn) in the company.

DOMS Industries demonstrated robust financial performance in the fiscal year ending March 2023. Net profit of the company saw a 567.2% increase year on year (YoY) reaching Rs 958 million (m).

The revenue surged by 77.3% to Rs 12.1 bn during the same period.

For detailed insights on the company, check out 5 things to know about DOMS.

Why Glenmark Pharma Share Price is Falling

Moving on to the pharma sector, Glenmark Pharma was in the news today.

On Wednesday, 20 December 2023, the share of Glenmark Pharma experienced selling pressure and tanked over 2% today.

The fall in the share price came after the Competition Commission of India (CCI) approved Nirma's acquisition of the majority shareholding in Glenmark Life Sciences, a subsidiary of Glenmark Pharmaceuticals.

If you remember, back in September 2023, Glenmark Pharmaceuticals had announced the approval of the divestment of a 75% stake in its subsidiary, Glenmark Life Sciences, to Nirma for Rs 56.5 bn.

As of June 30, Glenmark Pharmaceuticals held an 82.84% stake in Glenmark Life Sciences. And, promoters are required to bring down their shareholding to 75% within a specified time frame according to the regulations set by SEBI.

Glenmark Pharmaceuticals has a three-year period, until August 2024, to achieve the required reduction in public shareholding.

As the stake was acquired by Nirma, the stock price of Glenmark Pharma and Glenmark Lifescience both came under selling pressure.

Glenmark Life Sciences is involved in the business of development, manufacturing, and sale of Active Pharmaceutical Ingredients (APIs) and intermediaries, as well as providing contract development and manufacturing organization (CDMO) services for APIs.

Whereas, Nirma is known for its diversified portfolio in consumer products, including detergents, soaps, and industrial products such as soda ash, linear alkyl benzene, and more.

Till October 2023, the stock has offered a return of 92%.

BPCL to Set Up a New Refinery

Moving on to news from the energy sector, Bharat Petroleum Corporation Ltd (BPCL) was in news.

On Wednesday, 20 December 2023, the stock of BPCL witnessed nearly 1% increase in early trade but then due to bearish market sentiment the share tanked about 1.5%.

The rally in early trade was followed by the company's announcement of plans to establish a polypropylene unit at its Kochi refinery.

The company's board approved the proposal for setting up the polypropylene unit at a gross project cost of Rs 50.4 bn.

The proposed capacity addition is 400 kilo-tonnes per annum (KTPA) of polypropylene, and the project is expected to take approximately 46 months from the date of investment approval.

BPCL sees opportunities in the production of polypropylene, given the robust growth in the petrochemical segment's market demand in India.

Polypropylene has wide applications in downstream industries, including packaging films, sheets, boxes, containers, bags, homeware, personal care, and everyday usage articles. The move aligns with the company's strategic focus on the petrochemical sector.

Additionally, on 8 December 2023, BPCL collaborated with Tata Passenger Electric Mobility to set up 7,000 charging stations for electric vehicles across India.

And 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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