Sensex's 1,314-Point Rollercoaster: 3 Key Factors Behind Volatility In Stock Market Today

Indian stock market ended the session in red for the fourth consecutive session this week after having a highly volatile trade with BSE Sensex witnessing a 1,314 points volatility. Analyst attributed the decline was attributed to sell-off in broader market-- mid cap and small cap stocks-- higher crude prices and weak global cues. 

Sensex, the 30-share index, closed at 73,123.83, down 125.56 or 0.17 per cent, recovering from mid-session losses on the back of buying in heavyweights including Eternal, L&T, Reliance and TCS. The index hit an intraday high and low at 73,766.51 and 72,452.37, respectively, showing a steep volatility of 1,314 points during the session. 

The index started the session in green at 73,665.64 as compared to the previous session's closing of 73,249.39. However, it did not keep the momentum due to subdued sentiment in the broader market.  

Nifty50 ended the session at 22,600, down 87.65 points or 0.39 points. 

Also read: Swiggy Shares Plunge 17% To Hit 52-Week Low, Brokerages Slash Target Price

3 Key Factors Behind Decline in Stock Market Today 

Sell-off in the broader market, crude oil breaching $114 per barrel and weak global cues remained the key drivers of the Indian equity market today. 

1. Crude Price

The uptick in crude prices after Houthi attacks in Saudi Arabia put significant pressure on investors' sentiment. Most recently, Brent Crude, the global benchmark, was trading at $114.4 per barrel. WTI crude was above $100 per barrel. 

2. Weak Global Cues

European markets traded sharply lower in early trade after the US market closed in red in the last session. However, Asian markets recovered from early losses. 

3. Sell-Off In Mid And Small Caps  

The broader market experienced significant pressure during the session amid selling in mid-cap and large-cap stocks. Nifty Mid Select index fell 2.12 per cent, Nifty Mid-cap 100 declined 2.21 per cent, and Nifty Small Cap 100 settled 2.94 per cent lower.

"The key concern in today’s market is the disproportionately sharp correction in mid- and small-caps relative to the Nifty. Valuation concerns and unwinding of leveraged positions, combined with surging crude prices and weak global cues, have intensified pressure on the broader market," said Vinod Nair, Head of Research, Geojit Investments Limited.

Top Losers And Gainers

From the 30-stock Sensex index, 10 stocks settled higher while 20 closed in negative territory.