Stock market crash today: Where are BSE Sensex, Nifty50 headed? Top factors investors should watch out for

Stock market today: BSE Sensex and Nifty50, the Indian benchmark equity indices, which had a dream run in the last month of December, have been witnessing bouts of profit booking in the first month of 2024. While the stock market is in a long-term bull run and analysts and brokerages are positive about the Indian markets amid global headwinds, pockets of decline are being seen in the last few days.
BSE Sensex closed the day on Tuesday at 70,370.55, down over 1,050 points or 1.47%.The Nifty50 also mirrored the decline, closing at 21,238.80, down over 330 points or 1.54%. According to PTI, the stock market crash eroded Rs 8.5 lakh crore of investors’ wealth today.
The broader market witnessed sharper fall with Midcap100/Smallcap100 down 3% each. Pharma was the only sector which gained 1.7%. Rest all sectors witnessed selling pressure with Media being the biggest loser of 13% on the back of Zee-Sony deal being called off.Nifty Realty too fell 5.3% following weak results from Oberoi Realty. PSU banks, railways, power utilities were some of the sectors which saw profit booking after witnessing sharp run-up in the recent past.
Siddhartha Khemka, Head – Retail Research at Motilal Oswal Financial Services Ltd noted that domestic equities opened positive but soon drifted into red witnessing huge sell-off amid profit booking.
“Global sentiments turned cautious after Fitch Group statement that South Asian economies would be most affected, amid rising hostilities in the Red Sea due to Houthi attacks and India’s economic forecast faces a significant risk on account of a prolonged spell of disruptions. Further BoJ followed China and kept interest rates unchanged,” Siddhartha Khemka told TOI.
While global factors will continue to impact market sentiment, analysts believe that over the next few days quarterly earnings will drive individual stock and sector movements. Additionally, Indian markets are in the overbought zone, feel experts, hence profit booking is expected to sporadically continue.

Where are BSE Sensex and Nifty50 headed in the near term? What should investors do?

Sandeep Raina, Executive Vice President-Research, Nuvama Professional says, “We know that markets are trading in an expensive zone at 21x12m EPS of Rs 1080.” “We should broadly remain cautious for the short term and wait for the right time to enter as there is a possibility of mild correction,” Raina tells TOI.

According to Varun Saboo, Head – Equities, Anand Rathi Shares and Stock Brokers, markets have seen a very strong run in the last few quarters. “It’s natural for corrections to come and it’s getting visible in the mid caps. However, we believe one must buy into these corrections and we expect large caps to outperform mid caps in the next 12 months,” Saboo told TOI.
Siddhartha Khemka believes that investors are awaiting US GDP data along with ECB rate decision. On the domestic front, this week is a truncated week with just three trading days. “Given weak global cues and mixed set of earnings released so far, the market is likely to consolidate and may drop a little further till the next set of fresh positive triggers,” he said.

Sandeep Raina points out that the third quarter numbers have been mixed. “BFSI numbers were not good while IT reported a good set of numbers. We find some value in IT and chemicals where incremental money can be put,” he said. “While we remain bullish on the long term with sectors like power, infrastructure, defense, for the short term we should focus on results and their respective commentary by the management,” he added.

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