The Indian stock markets saw a decline for the second consecutive day on 10 July. Both Sensex and Nifty were trading in red mark. Especially the shares of IT companies were under pressure due to the beginning of the quarterly results. Around 11 am, the Sensex was trading at 83,237.48, declining 298.60 points or 0.36 per cent. At the same time, the Nifty was trading at 25,381.05 with a decline of 95.05 points or 0.37 per cent. Shares like Bharti Airtel, Tech Mahindra, Sun Pharmaceutical Industries, Coal India and Cipla declined by 2 per cent on the Nifty.
There were 4 major reasons behind today’s decline in the stock market-
1) Start of earning season
Tata Consultancy Services (TCS), the country’s largest software company, is going to start the earning season by releasing its June quarter results today. The IT sector is currently facing many challenges. This includes concerns about weakness in global demand, trade stress and impact of Artificial Intelligence (AI). Prior to the TCS results, the Nifty IT index in today’s business declined by 1%. Prashant Tapse, Senior Vice President (Research), Mehta Equality, said, “The market direction is currently being decided by two big triggers. Tariff concerns and TCS first quarter results, which will come after the market closure on July 10.”
2) concerns related to trade deal
Investors also remain cautious due to uncertainty over the trade agreement between India and the US. Even though the Trump government of America has not yet included India in the new tariff list, the possibility of possible action has affected the market’s sentiments. VK Vijaykumar, Chief Investment Strategist of Geojit Financial Services, said, “The market has been in a limited range for the last one month and a big breakout beyond 25,500 is possible only when there is a positive news about the Indo-US trade deal. However, it will be difficult to retain a long-term fast with the news of the trade deal.”
3) Weak global signs
The weak signals received from foreign markets also affected the Indian market today. There was a mixed trend in Asian markets. Japan’s Nikkei 225 index was trading with a decline of 1%. Meanwhile, Wall Street futures were also trading in red mark, which is a sign of the weak start of the US stock market.
4) Pressure on shares of pharmaceutical companies
Today, the shares of pharmaceutical companies also saw selling pressure. US President Donald Trump has warned to impose 200% tariff on drug products. This tax may apply after one year of time. Experts believe that the move may disrupt the global supply chain and India, which is the largest exporter of generic drugs to the US, may suffer a major setback.
What do experts say?
According to Anand James, the main market strategist of Geojit Financial Investment, the Nifty has been trading in a limited range for some time and can now move towards a possible breakout. He says, “On the 15 -minute chart, a ‘descending widening nail’ breakout seems to be forming, which emphasizes the hope of moving upwards.”
He further said, “The area of 25,588 to 25,650 will be very important. If this level crosses, the Nifty can go from 25,730 to 25,850 and even from a strong speed to 26,200. Below is a significant support level, 25,440 is an important support level, if the Nifty slips below it, it can go from 25,300 to 24,920.”
