Bears take charge in final hour: NIFTY50, BSE SENSEX tumble 1.5%; IndiGo, ONGC among top losers

Stock market today: The stock indices, NIFTY50 and SENSEX, tumbled ending in the red after a subdued trading session on Friday, May 29, as investors remained cautious amid continued foreign investment outflows due to MSCI’s recent rebalancing move, dragging down heavyweight stocks amid mixed global cues.

The NIFTY50 closed 1.5% or 359 points lower at 23,547.75 points after Friday’s trading session, compared to 23,907.15 points at the previous market close, according to NSE data. The domestic investors failed to support the benchmark indices as massive foreign investor outflow gripped the domestic indices.

Meanwhile, the BSE SENSEX index closed 1.44% or 1,092 points lower at 74,775.74 points after the trading session on May 29, compared to 75,867.80 points at the previous stock market close, according to the exchange data.

Factors behind stock market fall

On May 29, stock market investors held a cautious approach with the indices witnessing stock-specific action during the last leg of the Q4 earnings season amid outflows, cautious rainfall predictions, and no positive updates from the US-Iran negotiations about the West Asia conflict.

Crude oil prices around $90 per barrel (bbl) in the global market also failed to uplift the investors’ sentiment as traders booked profits amid intense selling pressure on the final trading session of the week.

The global leading index services provider, MSCI, rebalanced its indices, which also resulted in large foreign investor outflows from the domestic stocks, likely emerging as one of the reasons behind the drop in Indian stocks.

In the recent announcement, MSCI also added a free-float factor framework to its constituents, which means that even if a stock is removed from the index, the new methodology will hold a buffer time period where the stock price will still swing due to weightage adjustments.

This further increases the volatility factor of the stocks, in turn impacting the overall markets.

The data suggests that MSCI added stocks like Federal Bank, MCX, National Aluminium Company, and Indian Bank from its MSCI Standard Index, while removing others like RVNL, Kalyan Jewellers, Jubilant FoodWorks, and Hyundai Motors.

On the smallcap front, 29 stocks were removed while 14 stocks were added to the MSCI Small Cap index. Due to the higher removal of stocks, this further intensified the volatility in the market. Market experts anticipated the outflow move due to the rebalancing impact on Friday.

The Indian stock market was also at a profit booking stage, as the cautious geopolitical sentiment remained ahead of any potential announcements from the United States over the upcoming weekend.

Latest reports from CNN suggest that although the United States and Iran have reportedly reached a tentative agreement on Thursday, US President Donald Trump has yet to sign on to anything official, as the investors continue to pin hopes on a successful third round of talks.

Top gainers & losers today

Stocks like Tech Mahindra, HCL Tech, Wipro, Nestle India, Larsen & Toubro, Asian Paints, and Dr Reddy’s were the top gainers as of Friday’s stock market close. NSE data showed that only seven out of the 50 constituents in the NIFTY50 index closed in the green.

Tech Mahindra was up 1.6%, HCL Tech was up 1.4%, Wipro was up 1.2%, Nestle India was up 1%, Larsen & Toubro was up 1%, Asian Paints was up 0.6%, and Dr Reddy’s gained 0.08% as of the market close.

While others like Power Grid Corp., IndiGo, ONGC, Max Healthcare, Eicher Motors, and Tata Consumer Products were among the top losers.

Power Grid Corp. lost 4.11%, IndiGo dropped 3.2%, ONGC lost 3%, Max Healthcare lost 2.8%, Eicher Motors lost 2.7%, and Tata Consumer Products lost 2.5% as of Friday’s market close.

Disclaimer: This article is purely for informational purposes and should not be considered investment advice from Upstox. Please consult with a financial advisor before making any investment decisions.