Sensex closes over 1.0% lower amid sell-off in small and mid-cap indices

India’s Sensex lost over 1.0% on Wednesday, undermined by small and midcap indices.
Sensex settled with mild gains on Tuesday, as markets stayed cautious ahead of India/ US CPI data.
For February, US CPI came in hotter-than-expected at 3.2% YoY; India’s inflation stayed flat at 5.09% YoY.

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The Sensex 30, one of India’s key benchmark indices, closed deep in the red on Wednesday, losing over one percent on the day, courtesy of the bleeding in small and midcap indices.

The Bombay Stock Exchange (BSE) Sensex 30 settled 1.23% lower on the day at 72,761.89. The BSE Midcap index crashed nearly 4.0% while the BSE Smallcap index plunged 4.5%.

Stock market news

The top gainers on Sensex on Wednesday were ITC, Nestle, Kotak Mahindra Bank, Bajaj Finance and ICICI Bank. Meanwhile, the top losers include Power Grid, NTPC, Tata Steel, Tata Motors and JSW Steel.
India's rising valuations prompted investors and foreign companies to sell their holdings.
Shares of Powergrid and NTPC tanked nearly 7.0%.
Shares of ITC rebounded amid an expected 3.50% stake sale by British American Tobacco (BAT) in the company on Wednesday.
Indian government allowed the Reserve Bank of India (RBI) to import gold without paying import levies.
India’s headline CPI retail inflation came in at 5.09% in February compared to the 5.1% print for January. Meanwhile, the country’s Industrial Production stayed unchanged at 3.8% in January, missing the estimates of 4.1%.
The US stock markets rebounded firmly on Tuesday, as a mixed US Consumer Price Index (CPI) report failed to have any impact on the June Fed rate cut expectations.
The US CPI rose 3.2% in February from a year ago, beating the market forecast of 3.1%. The monthly CPI increased 0.4% in the same period. Core CPI, which excludes food and energy prices, increased 0.4% from the last month and 3.8% over the year.
Markets continue to price in about a 70% chance that the Fed could begin easing rates in June, according to the CME FedWatch Tool.
Attention now turns toward the US Retail Sales and consumer sentiment data due later this week.

Sensex FAQs

What is the Sensex?

The Sensex is a name for one of India’s most closely monitored stock indexes. The term was coined in the 1980s by analyst Deepak Mohoni by mashing the words sensitive and index together. The index plots a weighted average of the share price of 30 of the most established stocks on the Bombay Stock Exchange. Each corporation's weighting is based on its "free-float capitalization", or the value of all its shares readily available for trading.

What factors drive the Sensex?

Given it is a composite, the value of the Sensex is first and foremost dependent on the performance of its constituent companies as revealed in their quarterly and annual results. Government policies are another factor. In 2016 the government decided to phase out high value currency notes, for example, and certain companies saw their share price fall as a result. When the government decided to cut corporation tax in 2019, meanwhile, the Sensex gained a boost. Other factors include the level of interest rates set by the Reserve Bank of India, since that dictates the cost of borrowing, climate change, pandemics and natural disasters

What are the key milestones for the Sensex?

The Sensex started life on April 1 1979 at a base level of 100. It reached its highest recorded level so far, at 73,328, on Monday, January 15, 2024 (this is being written in Feb 2024). The Index closed above the 10,000 mark for the first time on February 7, 2006. On March 13, 2014 the Sensex closed higher than Hong Kong’s Hang Seng index to become the major Asian stock index with the highest value. The index’s biggest gain in a single day occurred on April 7, 2020, when it rose 2,476 points; its deepest single-day loss occurred on January 21, 2008, when it plunged 1,408 points due the US subprime crisis.

What major corporations are in the Sensex?

Major companies within the Sensex include Reliance Industries Ltd, HDFC Bank, Axis Bank, ITC Ltd, Bharti Airtel Ltd, Tata Steel, HCL Technologies, Infosys, State Bank of India, Sun Pharma, Tata Consultancy Services and Tech Mahindra.

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