Market Wrap: After Months of Growth, the Nifty 50 Dips Amid Volatility

The Nifty 50 has dropped 1.4% in the month of August after a five-month run of gains. The local benchmark market indexes were able to end marginally higher on August 16 despite a day of turbulence.

The 30-share BSE Sensex increased by 137.50 points or 0.2% on Wednesday to settle at 65,539.42. In a similar vein, the Nifty likewise reached 19,465 while rising 30.45 points, or 0.16%. However, falls in metal and financial equities as a result of local retail price rises heightening prudence and worries about China’s economic recovery impacted market mood.

 

UltraTech Cement (2.44%), NTPC (2.04%), Tata Motors (1.92%), Infosys (1.78%), and Mahindra & Mahindra (1.55%) were among the top gainers on the Sensex. Tata Steel (-1.90%), Bharti Airtel (-1.14%), Bajaj Finserv (-0.86%), Axis Bank (-0.67%), and Bajaj Finance (-0.56%) were among the top losers.

Apollo Hospitals (2.60%), UltraTech Cement (2.37%), NTPC (2.11%), Infosys (1.75%), and Tata Motors (1.72%) were the top gainers for the Nifty 50. Tata Steel (-1.90%), Adani Ports (-1.56%), Hindalco (-1.51%), HDFC Life Insurance (-1.35%), and Bharti Airtel (1.22%) were among the biggest losers.

 

The Indian markets have seen substantial volatility in recent weeks, which has been affected by a variety of both local and international factors. These include a rise in US Treasury 10-year bond rates, a strengthening of the US dollar index, selling out by foreign institutional investors, a sharp increase in inflation, and a record low for the Indian rupee vs the US dollar.

 

From March to July, the Nifty 50 has been on an upward trend steadily, posting a huge gain of 14.5%. The index also hit a record high at this time, rising to 19,991 points. The current month, however, has seen a 1.4% fall.

 

Information technology (IT) giant Infosys’ release of weaker-than-anticipated Q1FY24 earnings served as the catalyst for the collapse, which not only hit Infosys but also other IT equities more broadly.

 

While European markets mainly traded in the green, Asian markets had closing lows in Seoul, Tokyo, Shanghai, and Hong Kong. On the other hand, US stock markets closed down on Tuesday. The benchmark for world oil, Brent crude, saw a little uptick of 0.01% to $84.90 per barrel.

 

Consumer price index (CPI) inflation in India increased significantly, reaching a 15-month high of 7.44% in July 2023, mostly as a result of rising food and vegetable costs. For the first time in five months, the CPI reading for July exceeded the Reserve Bank of India’s 6% upper tolerance threshold. According to information issued by the Ministry of Statistics and Programme Implementation on August 14, the consumer food price index (CFPI) for July increased to 11.51%, the highest level since October 2020.