The benchmark indices Sensex and Nifty took a significant nosedive of more than 1% on September 20. This decline was primarily driven by intense sell-offs in both banking and oil stocks, mirroring a global trend that had weakened in anticipation of the forthcoming interest rate pronouncement by the U.S. Federal Reserve.
For the second consecutive day, the 30-share BSE Sensex experienced a downward spiral, shedding a considerable 796 points or 1.18%, ultimately settling at 66,800.84. Over the course of the trading day, it plummeted by 868.7 points or 1.28%, reaching 66,728.14.
Simultaneously, the NSE Nifty registered a decrease of 231.90 points or 1.15%, concluding the session just below the psychologically significant 20,000 mark, at 19,901.40.
Analysts attributed this market turmoil to a surge in U.S. bond yields, which had reached a 16-year high, as well as concerns regarding rising crude oil prices exacerbating commodity inflation. These factors collectively cast a shadow over investor sentiment.
Further exacerbating the bearish sentiment were fresh foreign fund outflows and cautious anticipation of a series of imminent interest rate decisions by central banks worldwide. In addition to the U.S. Federal Reserve meeting, both the Bank of England (BoE) and the Bank of Japan (BoJ) were scheduled to convene later in the week.
Within the Sensex cohort, HDFC Bank bore the brunt of the downturn, plummeting by 4%. Other major underperformers included JSW Steel, Reliance Industries, UltraTech Cement, Maruti, Tata Steel, Wipro, Tech Mahindra, Bharti Airtel, and Larsen & Toubro.
On the flip side, Power Grid, Asian Paints, Sun Pharma, Axis Bank, NTPC, ITC, and Infosys were among the gainers for the day.
Meanwhile, across Asian markets, Tokyo, Shanghai, and Hong Kong concluded their trading sessions in the red, while Seoul managed to finish with modest gains. European markets, in contrast, displayed a positive outlook, while U.S. markets had closed on Tuesday with a less favorable outcome.
Notably, the global oil benchmark, Brent crude, experienced a 1.23% dip, settling at $93.18 per barrel. This occurred despite ongoing concerns surrounding supply shortages stemming from production cuts announced by Saudi Arabia and Russia.
As per exchange data, Foreign Institutional Investors (FIIs) divested equities valued at ₹1,236.51 crore on Monday. It is important to mention that equity markets remained closed on Tuesday due to the observance of Ganesh Chaturthi.
Breaking its impressive 11-day streak, the BSE benchmark incurred a loss of 241.79 points or 0.36%, ultimately settling at 67,596.84 on Monday. In parallel fashion, the broader Nifty experienced a downturn of 59.05 points or 0.29%, culminating at 20,133.30.