The Indian equity markets saw a sharp reversal on Wednesday, October 8, as profit booking and sectoral selling pulled indices lower from their early highs. After a strong start, the benchmark indices gave up gains made in early trade, reflecting cautious investor sentiment in a volatile session.
Market Performance
- Sensex: Opened firm, climbed 254.02 points to 82,180.77, later dropped over 500 points to 81,747.85. By 12:35 pm, it was at 81,691.77, down 234.98 points (0.29%).
- Nifty: Rose 70.25 points to 25,178.55 initially, then slipped below 25,050 to 25,045.05. By 12:35 pm, it was 25,023.10, down 85.20 points (0.34%).
- Market Breadth: 1,531 shares advanced, 2,105 declined, 138 unchanged.
The early momentum faded as investors booked profits in key sectors, highlighting a cautious stance amid rising volatility.
Main News
The reversal came despite a positive opening supported by IT stock buying and fresh foreign fund inflows. Several factors influenced the market pullback:
- Profit Booking: Selling pressure emerged in banking, auto, FMCG, and realty stocks as investors cashed in gains from recent rallies. The Nifty Bank index snapped a six-session gaining streak.
- Global Cues: Weak trends overseas added to domestic caution. In Asia, Hong Kong’s Hang Seng fell nearly 1%, while US markets ended lower on Tuesday.
- Crude Oil Prices: Brent crude rose 0.78% to USD 65.96 per barrel, raising inflation concerns and weighing on investor sentiment.
- Volatility Index: The India VIX climbed over 3% to 10.36, signaling increased uncertainty and cautious trading in the market.
These elements combined to reverse early gains, pushing indices below key support levels during the session.
Summary
Wednesday’s session reflects a classic intraday market reversal scenario, where strong early gains gave way to profit booking and risk management.
- Sensex and Nifty started the day on a positive note, buoyed by IT stocks and foreign inflows.
- Selling pressure in banking, auto, FMCG, and realty sectors trimmed gains.
- Global cues, rising crude oil, and higher volatility added to cautious sentiment.
The day highlighted how profit booking and sector rotation can quickly change market direction, reminding investors that early gains often require careful monitoring in volatile conditions.
