Market Update: Sensex, Nifty decline nearly 1% led by profit booking – here are the factors that led the drag

The Indian markets snapped an eight-day winning streak on Friday, as the benchmark indices – Sensex and Nifty50 – each tumbled nearly 1 per cent to trade below key levels of 63,000 and 18,700 during Thursday’s trading session.

According to several analysts, today’s declining trend is not that big and such profit booking was expected after the continuous rally. At around 01:30 PM, the Sensex was down 550 points or 0.86 per cent to 62,737.62 levels and the Nifty was down 146.8 points or 0.78 per cent to 18,665.7 levels.

Below are the key factors that dragged the domestic equity markets.

Profit Booking

Most sectors witnessed profit booking during today’s trade, led by the Auto index — which was down by over 1 per cent; followed by banks and financials — each down between 0.5-0.7 per cent. Similarly, Nifty FMCG, IT, Pharma, and Private Bank each dropped around 0.5 per cent on the NSE during Friday’s trade.

Weak Global Cues

Wall Street equities made little progress in Thursday's choppy session as investors digested economic data after a big rally in the previous session. Asian Indices dipped followed by US markets – South Korea’s Kospi fell most by around 2 per cent, followed by Nikkei down over 1.5 per cent.

RBI MPC Policy Next Week

The Reserve Bank of India’s (RBI) monetary policy committee (MPC) is scheduled between December 5-7, 2022. It is expected that the experts have suggested that the rate panel may increase the repurchase rate (repo rate) by almost 25-35 basis points (bps) in its upcoming meeting.

Mute Nov Auto Sales

Among all, two-wheeler manufacturers' November sales figures came poor on both year-on-year and month-on-month basis.

According to Rishi Vora, Research Analyst, Kotak Institutional Equities estimates that the domestic two-wheeler industry’s volumes declined more than 15 per cent month-on-month (MoM), adding that the export of two-wheeler segment remained under pressure in November 2022.