Sensex slumps 700 points, Nifty falls below 26,000 amid profit booking

Benchmark stock market indices opened Monday’s trading session on a negative note, dragged by declines in information technology and financial stocks.

The S&P BSE Sensex was down 685.85 points to 84,886 at 10:14 am, while the NSE Nifty50 fell 191.60 points to 25,987.35.

All the other broader market indices fell sharply in early trade as volatility jumped sharply.

High-weightage sectoral indices such as Nifty Bank, Nifty Financial Services and Nifty IT were all trading in the red, while Nifty Metal rose 1.6%.

The top five gainers in the Nifty50 were Tata Steel, JSW Steel, Hindalco, Asian Paints and Titan.

On the other hand, the top losers were Hero MotoCorp, BEL, Coal India, Axis Bank and Reliance Industries Limited.

Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said, “Market is likely to move into a consolidation phase in the near-term.”

“One significant factor that is influencing foreign portfolios is the outperformance of the Chinese stocks which is reflected in the massive surge in the Hang Seng index by around 18 % in September. This surge has been triggered by hopes of revival in the Chinese economy in response to the monetary and fiscal stimulus announced by the Chinese authorities,” he explained.

He also noted that the cheap valuations of Chinese stocks are keeping the momentum intact.n “This can prove to be a tactical trade which can sustain for some more time. This means FIIs may continue to sell in India and move some more money to better performing markets,” Vijayakumar added.

However, he clarified that FII selling is unlikely to impact the Indian market significantly since the massive domestic money can easily absorb whatever the FIIs are selling. “Investors can use dips to buy quality largecaps which are fairly valued.”