Sensex down 300 pts from day's high, Nifty below 26,250: 5 key reasons behind market decline

Stock market today: Sensex, Nifty see profit booking. The domestic equity benchmarks declined from record highs by noon on Monday as investors booked profits amid weak global cues and concerns over the interest rate outlook. The Sensex had surged 452.35 points to a fresh peak of 86,159.02 in early deals, while the Nifty advanced 122.85 points to a new high of 26,325.80. Both indices surpassed their previous records hit on November 27. By 11:30 am, however, the Sensex had retreated more than 300 points from the day’s high to 85,848.18. The Nifty slipped below the 26,250 level to 26,243.70. Titan, Bajaj Finance and Sun Pharmaceutical Industries were among the major laggards in the Nifty50 index, declining up to 1 percent, while Kotak Mahindra Bank and Adani Ports and Special Economic Zone were the top gainers, rising up to 2 percent. Market breadth also turned negative as about 1961 shares advanced, 1687 shares declined and 214 shares unchanged. Key reasons behind market decline 1) RBI rate cut seen unlikely: Stronger-than-expected GDP growth has reduced expectations of a near-term rate cut by the RBI. The benchmark 10-year bond yield rose from 6.47 percent to 6.52 percent on Friday, reflecting the market’s assessment that monetary easing may be off the table for now. Barclays said it no longer expects a rate cut at the December 5 policy meeting, noting that the robust growth numbers outweigh the impact of unusually low October inflation. The brokerage expects the central bank to maintain a pause while sounding dovish and revising up its growth forecast. Dr V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said the economy "doesn’t need a monetary stimulus when it is firing on all cylinders", adding that this has acted as a dampener for sentiment. Strong Q2 GDP impresses D-Street, but experts say Dec rate cut by RBI seems unlikely 2) Weak global cues: Asian markets were subdued, with South Korea’s Kospi and Japan’s Nikkei 225 trading lower. Wall Street futures were down by up to 1 percent, signalling a weak start for the US markets. Stock Market LIVE Updates 3) FII selling: Foreign Institutional Investors sold equities worth Rs 3,795.72 crore on Friday. Persistent FII outflows typically weigh on domestic markets. 4) Rise in crude oil prices: Brent crude gained 1.62 percent to USD 63.39 per barrel. Higher crude prices are negative for India as they raise import costs. 5) Rupee opens soft: The rupee began the month on a subdued note. Despite support from strong GDP data, the currency was weighed down by routine dollar demand from importers and outflows. The rupee was at 89.47 against the U.S. dollar at 10 am, broadly steady compared to 89.4575 on Friday.