Sensex Plummets Over 1,000 Points: What’s Causing Concern Among D-Street Bulls?
The primary drivers behind the decline in both the Sensex and Nifty were falling information technology and financial stocks, particularly the heavyweight Reliance Industries Limited. Reliance, along with ICICI Bank, HDFC Bank, and Axis Bank, contributed significantly to the Sensex’s drop.
Other notable contributors to this downturn included Bharti Airtel, Mahindra & Mahindra (M&M), State Bank of India (SBI), Tata Consultancy Services (TCS), Infosys, and Tata Motors.
On the sectoral front, indices such as Nifty Bank, Auto, Financial Services, IT, Media, Realty, Healthcare, and Oil & Gas experienced declines of up to 1.6%. Conversely, Nifty Metal gained 1.5%, continuing its positive momentum following China’s announcement of measures to stimulate its slowing economy.
Meanwhile, the fear gauge, India VIX, surged by 7%. This broad-based sell-off highlights increasing concerns among investors regarding market valuations and potential profit-booking activities.
Market experts have observed that Foreign Institutional Investors (FIIs) are increasingly turning their attention to Chinese markets, driven by a substantial surge in the Hang Seng index, which rose approximately 18% in September. This upswing reflects renewed optimism about the Chinese economy, fueled by recent monetary and fiscal stimulus measures from Chinese authorities.
Highlight
- Sensex crashes over 1,000 points; Nifty50 falls nearly 300 points
- Market capitalization of BSE-listed companies drops by Rs 3 lakh crore
- Falling IT and financial stocks drive down Sensex and Nifty
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, suggested that this trend may lead to a consolidation phase in the Indian market. Additionally, geopolitical tensions, particularly the escalating Israeli strikes across Lebanon, have introduced further uncertainty to global markets.
While oil prices have remained relatively stable due to potential supply increases, the ongoing conflict in the Middle East has raised concerns about energy supplies. Brent crude futures increased by 0.71%, while US West Texas Intermediate rose by 0.63%, impacting market sentiment and placing pressure on the Indian equity market, which is heavily dependent on oil imports.
Investors are also on edge ahead of key US economic data and Federal Reserve Chair Jerome Powell’s speech this week. Market participants are closely monitoring indicators related to monetary policy, with important data points like job openings and private hiring numbers set to be released. The week will culminate with the US payrolls report, which could influence the Federal Reserve’s decision on a potential interest rate cut in November.
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