Stock market news (September 6): Sensex falls 800 pts, Nifty below 24,900 levels

After a weak start taking mixed global cues extending losses and were last down significantly. At around 10:17 am, Nifty was down by over 1 per cent or 258.8 at 24,886.3, while the Sensex was down 0.99 per cent or 810.36 at 81,390.8.

Here are the factors that are driving the losses:

Across the board sell-off

The fears around the US August non-farm payrolls data has fuelled across-the-board sell-off. The PSB stocks, auto as well as oil and gas stocks are down up to 2 per cent.

US non-farm payrolls data in focus for August

Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services said, "The near-term trend in the market will be influenced by the US jobs data to be published tonight. There is a consensus that the Fed will cut rates in the September meeting but the extent of the cut will be determined by the jobs data. If the August jobs numbers come lower than market expectations and the unemployment rises higher than market expectations, the Fed may even cut by 50 bp. But this may not be taken positively by the market. The market may even react negatively factoring in serious growth concerns and even a hard landing scenario for the US economy may start weighing on the market. Investors can wait for this crucial data and take a call based on that.

On Thursday, the US released the  weekly jobless claims report from the Labor Department on Thursday, The numbers pointed that the unemployment rolls are shrinking to levels last seen in mid-June.

Perhanps it reduces the urgency for the Federal Reserve to deliver a 50 basis points interest rate cut this month.

High inventory ahead of the festive season

Federation of Automobile Dealers Associations (FADA), the apex national body of Automobile Retail Industry, said that ahead of the festive season the industry faces double the inventory than usual.

Technicals

Anand James, Chief Market Strategist, Geojit Financial Services on Nifty outlook said, While optimism remained in the initial part, the inability to clear 25280 weighed on the traders, allowing slippages to our downside marker placed in the 25190-150, and even penetrate the same slightly in the closing hour. These two events, the rejection trades at the top and test of support at the bottom, is classic of a consolidation that awaits momentum.

Towards this end, we will begin the day expecting a swing higher, as long as yesterday’s follow through weakness does not allow slippage past 25070, A direct fall below 25070 should however set up a collapse aiming 24400 with 24800 offering initial support, but our favoured view continues to expect 25800 but 25280 will continue to be an obstacle, he added.