The benchmark Sensex erased most of the gains it had made throughout the week, experiencing a decline of up to 1.3% during intraday trading on Thursday.
The 30-stock index of Indian equities saw companies lose over Rs 1.5 lakh crore in value for the day, with IT giants such as Infosys Ltd. and Tata Consultancy Services Ltd. being the most affected.nd Tata Consultancy Services Ltd. being the most affected, with Infosys Ltd. and Tata Consultancy Services Ltd. leading the decline.
The two IT companies contributed to 230 points of decline in the index level, followed by Mahindra & Mahindra Ltd.
Here are three reasons why the index saw a decline:
IT Stocks Correct
The Nifty IT index was the top sectoral gainer in November, increasing by over 7%, while all other sectors experienced declines. Amid these market downturns, the Nifty IT index provides a safer investment option, as it is considered a defensive play among Indian equities.
Thus, a 2% decline on Thursday may be attributed to a correction after the strong returns delivered by the index for most of the month.
Jitters Amid Benchmark's Recovery
After experiencing a decline in both October and the majority of November, the Sensex recorded a sudden jump on November 22, marking its largest increase in over five months with a rise of 2.54%. Although the index continued to recover on the first day of this week, it corrected by around 1% on Thursday. Despite this recent decline, the index level remains above the gains seen on Nov. 22.
Mahindra & Mahindra Falls On Lower Sales
The auto sector experienced a 19% decline in retail sales during November, according to data from Vahan. The stock fell even after the launch of two electric vehicles on Nov. 26, which failed to generate enthusiasm among investors.
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