The Nifty Bank index extended its losing streak to a third consecutive trading session on Thursday, dropping by 1.47% to 50,559 points. The decline was largely driven by a sharp drop in Axis Bank’s stock.
Market sentiment turned negative following Axis Bank's Q1 FY25 performance report, which was released after market hours on Wednesday. This led to a significant decrease in Axis Bank's shares in today's session.
Axis Bank’s shares opened with a substantial gap down, falling by 3.14% to ₹1,200 each. The stock’s downward trend persisted in the early trade, hitting a 7-week low of ₹1,162, representing a 6.2% drop and marking its largest intraday decline since June 4.
As of the latest update, the Nifty Bank index was down by 670 points, with 318 points of this decline attributable solely to Axis Bank, contributing nearly 50% to the index’s overall drop. Additionally, ICICI Bank, another major private sector bank, experienced a 2.5% decline, accounting for approximately 38% of the index’s decrease.
Other banks, such as SBI, IndusInd Bank, Federal Bank, AU Small Finance Bank, IDFC First Bank, and Bank of Baroda, were also trading lower, with losses ranging from 0.33% to 1.2%. Conversely, Kotak Mahindra Bank and HDFC Bank managed to hold on to modest gains, with upticks between 0.3% and 0.5%.
Overall, the index has dropped by 3.03% this week so far.
Looking at the benchmark indices, both benchmark indices, the Nifty 50 and the S&P BSE Sensex, continued their downward trend. The Nifty 50 fell by 0.83%, while the Sensex slipped by 0.75%.
This negative market sentiment was also influenced by the poor performance of US benchmark indices on Wednesday. The S&P 500 and Nasdaq experienced their worst day since 2022 in the previous session, driven down by disappointing earnings reports from major tech companies: Tesla and Alphabet.
Tesla reported a 40% drop in profits, leading to an 11% decline in its shares on Wednesday, marking their worst drop since January. Alphabet, despite exceeding expectations for profit and sales growth, fell short in ad revenue from its YouTube segment, which did not meet analysts' hopes.
Small-cap and value-oriented stocks have gained momentum after lagging behind the S&P 500 and Nasdaq Composite for much of 2024.
Investor concerns were further heightened by weaker-than-expected U.S. manufacturing data. The U.S. PMI flash manufacturing output index dropped to 49.5 in July, indicating a contraction as new orders, production, and inventories fell. Additionally, June’s new home sales figures were below economists' expectations, adding to the market’s unease.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
