Sensex Falls To 81,362, Nifty Ends 24,793; Why Market Dropped For The 3rd Day?

Indian stock market benchmarks, Nifty and Sensex, ended in red after trading in a narrow range for the third session on Thursday, June 19 with broader markets registering deep cuts amid global worries over possible U.S. involvement in the Middle East conflict.

BSE Sensex closed at 81,361.87, down 82.79 points or 0.10 per cent, while The Nifty50 index ended at 24,793.25, down 18.8 points or 0.08 per cent.

Reasons Behind the Market Decline:

The Indian stock market declined amid growing concerns over global geopolitical tensions and economic uncertainty as fears intensified that the ongoing conflict between Israel and Iran could escalate into a broader crisis.

Adding to the uncertainty, U.S. President Donald Trump warned that it was "too late" for Iran to negotiate and hinted at a significant development expected next week, further unsettling global markets.

Meanwhile, the U.S. Federal Reserve revised its economic outlook, projecting slower growth and higher inflation, raising the fears of stagflation in the world's largest economy. On June 18, the Fed kept its benchmark interest rate unchanged at 4.25%-4.50% and emphasized continued risks from the ongoing trade war, driven by Trump's tariff policies.

The Indian equity index experienced rangebound movement with a negative bias as cautious sentiment spread across the globe, driven by concerns over potential U.S. involvement in the Middle East conflict," said Vinod Nair, Head of Research, Geojit Investments.

"Investor mood was further affected by the Fed's decision to keep interest rates unchanged while signalling persistent inflation and slower economic growth, which weighed on software export stocks,"Vinod Nair added.

Top Gainers and Losers:

Adani Ports, Bajaj Finance, Shriram Finance, Tech Mahindra, Adani Entertainment and Jio Finance were among top Nifty losers, down by around 2%.

While Tata Consumers, Eicher Motors, Mahindra & Mahindra, Wipro, Dr. Reddy and Titan were among few gainers on the Nifty today.

Among the sectoral indices, except for Auto which ended 0.52 per cent higher, all other sectoral indices settled in red. The Nifty PSU Bank emerged as the top laggard, down 2.04 per cent, followed by Nifty Media, Realty, Metal, and Energy, falling over 1 per cent each.

In the broader markets, Nifty Midcap 100 settled 1.57 per cent down, and the Nifty Smallcap fell 2 per cent drag by Finolex Industries and Cyient for the third consecutive day. All sectoral Indices closed lower for the day barring Nifty Auto.

Technical Market Outlook:

"The Nifty witnessed a lackluster expiry on the NSE, as the index remained within a narrow range throughout the session, indicating indecisiveness ahead of any directional move. On the hourly chart, the index continues to trade below the 200-DMA, reflecting weak market sentiment.

On the daily chart, it has slipped below the 21-EMA, further reinforcing the bearish outlook. This negative sentiment is likely to persist as long as the index remains below 24,850. On the downside, support is seen at 24,550," said, Rupak De, Senior Technical Analyst at LKP Securities.

Rupee VS Dollar:

The Indian Rupee also fell during the day. It closed at 86.72 per U.S. dollar, down 0.24% from the previous close of 86.47.

"The Indian Rupee extended its decline for the third consecutive day, shedding another 24 paise against the US dollar, marking its lowest close in the last three months. This depreciation was primarily driven by persistent geopolitical uncertainty and a hawkish stance from the US Federal Reserve, making the dollar more attractive," said Nandish Shah - Deputy Vice President, HDFC Securities.