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Stock Markets down again – Why did it fall today?

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Stock Markets crashed on last trading day of the week as foreign investors pull money out due to global concerns. Index heavyweights ITC and HDFC led the downfall and others stocks followed.

Stock Markets: The S&P BSE Sensex, lost 329.26 points or 1.24% at 26,230.66, and the Nifty 50 index lost 106.10 points or 1.3% at 8,086.80.

The S&P BSE Sensex, lost 329.26 points and the Nifty 50 index lost 106.10 today
The S&P BSE Sensex, lost 329.26 points and the Nifty 50 index lost 106.10 today

The market breadth was negative as on BSE, 1,779 shares declined and 884 shares rose. The BSE Mid-Cap index also fell by 1.26% and the BSE Small-Cap index fell by 1.37%.

Many factors have contributed to the markets’ crash today, a few of major ones are:

Global Markets Fell: Global markets also declined as Asian and European stocks lead the fall on global uncertainties.

Auto Sales Figures of November: Major car manufacturers reported monthly fall in the sale during the November. Tata Motor reported a fall off 28% in the domestic sales of passenger and commercial vehicle. Mahindra & Mahindra also followed the suit and reported 38% slide in the sales. However, Maruti Suzuki reported a growth of 2% in November. Auto stocks crashed. Escorts (down 1.62%), Ashok Leyland (down 3.16%), Mahindra & Mahindra (down 1.09%) and Maruti Suzuki India (down 3.56%).

Outflows by FPIs: Foreign Portfolio Investors have sold out shares worth Rs 18,244 crore from domestic equity markets in November. The outflow still continues as the global macroeconomic situations have not recovered yet and US Dollar seems to be the safest bet as of now.

Eventful Weekend Ahead: Markets’ participant’s sentiments have become very cautious considering the events during the weekend. Data regarding US non-farm payroll, US Fed meeting and Italy referendum on EU are highly impactful to equity markets. RBI’s market stabilisation scheme (MSS) will also some impact on the markets. In the coming week, high volatility is expected in the markets. Reserve Bank’s policy review will also lead to increased volatility in the markets.

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