In afternoon trade on Monday, the BSE Sensex witnessed a significant dip of more than 500 points, primarily attributed to the weakness in FMCG, banking, and IT stocks.
As of the latest update, the BSE Sensex is trading at 71,444 points, down by 580 points. Notable declines are observed in SBI, which is down by more than 2%, while ICICI Bank and Axis Bank are both experiencing a 1% decrease. The FMCG sector is also facing a downturn, with key players such as HUL, Nestle, and Asian Paints seeing declines of more than 1%. Other notable stocks affected include M&M, Tech Mahindra, and TCS, all down more than 1%.
The earlier year-end rally, which propelled the Nifty up by approximately 14% from the lows in October 2023, seems to be losing momentum, according to V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
A significant challenge to the ongoing rally stems from the US market, which is displaying signs of weakness. Concerns are rising in the US market, particularly regarding the expectation of a rate cut in March. The tight labor market and lower-than-expected unemployment data have fueled skepticism about the possibility of a rate cut. While inflation appears to be under control, indicating the end of the rate-hiking cycle and a potential Fed pivot, disappointment in the market could ensue if the anticipated rate cut in March does not materialize. This sentiment is reflected in the firming up of the 10-year US bond yield, surpassing 4%, as observed by Vijayakumar.
(With Agency Inputs)
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