Sensex crashes 1,547 points as STT hike on derivatives triggers massive selloff

Market Overview - The markets experienced a significant selloff, with the Sensex dropping 1,546.84 points to close at 80,722.94 and the Nifty falling 495.20 points to end at 24,825.45 due to the proposed increase in Securities Transaction Tax (STT) on futures and options [1][3] - The Sensex and Nifty recorded their sharpest percentage declines since April 7, 2025, closing at a four-month low, with the Sensex down 1.88% and the Nifty down 1.96% [2] Sector Performance - The proposed STT increase from 0.02% to 0.05% on futures is expected to raise transaction costs across the derivatives market, impacting both individual and institutional investors [3] - Capital market, defence, and PSU bank indices saw declines of over 5%, with Bharat Electronics Limited (BEL) falling 6.02%, Hindalco down 5.78%, and ONGC dropping 5.50% [4] - The Nifty Midcap 100 and Nifty Smallcap 100 indices fell by 2.24% and 2.73%, respectively [2] Stock Movements - Technology and healthcare stocks provided limited support, with Wipro gaining 2.12%, Max Healthcare up 1.82%, and TCS increasing by 1.74% [5] - The market breadth was negative, with 2,375 stocks declining compared to 1,759 advancing, and 253 stocks hitting 52-week lows [6] Government Borrowing and Market Sentiment - The government announced gross borrowings of ₹17.20 trillion, exceeding market expectations, which may negatively impact bond market sentiment [7] - Heavy selling was observed in metals, with copper futures down over 5% and gold and silver futures crashing more than 5% and 9%, respectively [7] Technical Analysis - The market formed a long bearish candle on daily charts and is trading below the 200-day SMA, indicating a negative outlook [8] - Analysts expect continued volatility, with immediate support for the Nifty at 24,700–24,650, and a sustained move below 24,650 could lead to further declines [8]