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Stock Market Crash: With international uncertainties and home elements equivalent to a weak rupee and FII outflows persisting, markets are prone to stay unstable within the close to time period.
Global markets remained underneath strain, contributing to the weak spot in Indian equities. (Representative picture)
Stock Market Crash: The Sensex and Nifty witnessed a pointy decline of over 1 % on December 17 as investor sentiment turned cautious forward of the US Federal Reserve’s rate of interest determination on Wednesday. Heavy promoting strain in finance, metallic, FMCG, and IT shares, together with weak international cues and a depreciating rupee, added to the market woes.
The BSE Sensex plunged 1,015.64 factors, or 1.2 %, hitting an intraday low of 80,732.93, whereas the NSE Nifty fell beneath the 24,400 mark, shedding 284 factors in the course of the session.
According to Moneycontrol, a number of key elements, together with international financial uncertainties, fluctuations in commodity costs, and issues over rate of interest hikes by central banks, have contributed to at the moment’s vital market crash, with traders reacting to a mix of home and worldwide pressures which have led to widespread sell-offs throughout main indices.
Key Factors Driving Today’s Stock Market Crash
1. US Fed Jitters
Investors are conserving a detailed eye on the US Federal Reserve’s rate of interest determination scheduled for Wednesday. Markets have already factored in a 25 foundation factors fee lower, however investor focus will shift to Fed Chair Jerome Powell’s commentary for future fee steering.
“Any departure from a dovish commentary will likely be adverse for markets,” stated V Okay Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
2. Rupee Hits All-Time Low
The Indian rupee fell to a brand new lifetime low of 84.92 in opposition to the US greenback on December 17, impacted by overseas fund outflows and weak home equities.
“The rupee fell in NDF (Non-Deliverable Forward) markets after a report commerce deficit for November, primarily attributable to elevated gold shopping for,” famous Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP.
3. Lack of Fresh FII Buying
The absence of contemporary shopping for by Foreign Institutional Investors (FIIs) additional dampened sentiment. FIIs offloaded equities price Rs 279 crore on Monday, extending their cautious stance.
“It appears FIIs are persevering with their promoting at the moment, as midcap and smallcap indices are nonetheless holding floor,” commented Ajit Mishra, Senior Vice President – Research at Religare Broking.
4. Selling in Blue-Chip Stocks
Heavy promoting in index heavyweights dragged the broader markets decrease. Stocks equivalent to Reliance Industries, Bharti Airtel, Nestle, Larsen & Toubro, Bajaj Finserv, HDFC Bank, JSW Steel, and Titan have been among the many main laggards from the 30-share Sensex pack.
5. Bank of Japan Policy Meet Prompts Caution
Investors are additionally awaiting the end result of the Bank of Japan (BOJ)’s last coverage assembly for the 12 months, scheduled for December 18-19. The BOJ is predicted to deliberate on elevating short-term rates of interest from the present 0.25 %.
The BOJ’s determination follows the Fed’s end result, which markets anticipate will embrace fee cuts.
Global Markets in Focus
Global markets remained underneath strain, contributing to the weak spot in Indian equities. Elsewhere in Asia, Seoul, Shanghai, and Hong Kong traded decrease, whereas Tokyo managed to remain in constructive territory. On Wall Street, indices closed principally larger on Monday.
“It’s fascinating for the BOJ to carry off on elevating charges till the financial system recovers a bit extra,” Reuters quoted a senior Japanese authorities official.
Outlook: Cautious Sentiment to Continue
“We count on markets to consolidate inside a broad vary as sentiments stay cautious forward of the US Fed and Bank of Japan’s rate of interest choices,” stated Siddhartha Khemka, Head – Research, Wealth Management at Motilal Oswal Financial Services Ltd.
With international uncertainties and home elements equivalent to a weak rupee and FII outflows persisting, markets are prone to stay unstable within the close to time period.
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