The slump was not caused by a single factor but a mix of global cautiousness and domestic headwinds. Here are top five reasons why the stock market was unusually down today.
The Bombay Stock Exchange in Mumbai.
The Indian stock market suffered a late sell-off on Monday, with benchmark indices falling sharply as more than Rs 7 lakh crore of investor money was wiped out. The 30-share S&P BSE Sensex plunged over 800 points and the Nifty Fifty went down the 26,000 mark. Meanwhile, both the BSE Midcap and Smallcap indices dropped by over 2 percent. The slump was not caused by a single factor but a mix of global cautiousness and domestic headwinds. Here are top five reasons why the stock market was unusually down today.
US Fed call: A major factor was the serious caution ahead of the United States Federal Reserve’s interest rate decision. The possibility of the American central bank maintaining a hawkish stance or a surprise call led investors to go for aggressive de-risking.
Weak rupee: The Indian rupee is hovering near all-time low values against the US dollar (around Rs 90.38 today). The major currency depreciation kills returns for foreign institutional investors (FIIS), prompting them to sell their equity holdings.
Midcap and Smallcap fall: The sell-off was also felt in the broader market, with Midcap and Smallcap indices falling more than 2 percent. This leads to profit-booking and move to safety as investors let go of riskier, smaller stocks first.
Surging crude oil prices: Higher global crude oil prices increase India’s import bill and lead to inflationary pressures.
Trade deal pessimism: The ongoing uncertainty around an India-US trade deal also affected investor sentiment, especially in trade-sensitive sectors.
Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: dnaindia.com
