Sensex tumbles 954 points; Nifty settles at 17,016: Top reasons behind market fall


NEW DELHI: Equity indices dragged for the fourth straight session on Monday with the benchmark BSE sensex crashing over 900 points amid weak global market trends and foreign fund outflows.
The 30-share BSE index tanked 953.70 points or 1.64% to settle at 57,145. During the day, it plummeted 1,061 points or 1.82% to 57,038. The NSE Nifty fell 311.05 points or 1.80% to end at 17,016.30.
Maruti was the top loser of the day with 5.49% fall in share price, followed by Tata Steel, ITC, Axis Bank and NTPC.
On the other hand, IT stocks were the only sector to finish in green. HCL Tech, Asian Paints, Infosys, Ultra Cemco surge over 1% each.
Both the Nifty small-cap and mid cap indexes underperformed the benchmark Nifty 50, tumbling 3.4% and 3.1%, respectively.
In the last four sessions, the BSE benchmark has slumped 2,574.52 points or 4.31 per cent. The market capitalisation of BSE-listed firms tumbled Rs 13,30,753.42 crore in four sessions to reach Rs 2,70,11,460.11 crore.
Here the top reasons for today’s market crash:
* Slowdown worries
Investors dumped equities and other risky assets on worries over a slowdown in global economic growth.
Last week, the United States and half-a-dozen other countries raised interest rates, with some even committing to further hikes, continuing to put pressure on the financial system.
* RBI rate hike in focus
The Reserve Bank of India (RBI) is set to raise rates again this week, with a slim majority of economists in a Reuters poll expecting a half-a-percentage-point hike and some others expecting a smaller 35-basis-point rise.
“Earlier it was expected that the RBI will take a pause. However, given the firming up of food prices, the market is now building another 35 basis point hike after this, which is affecting sentiment,” Gaurav Dua, head of capital market strategy at Sharekhan told Reuters.
* Aggressive monetary tightening
Last week, the United States and half-a-dozen other countries raised interest rates, with some even committing to further hikes, continuing to put pressure on the financial system.
Last week, the Fed lifted its benchmark rate, which affects many consumer and business loans, to a range of 3% to 3.25%. It was near zero at the start of the year.
The Fed also released a forecast suggesting its benchmark rate could be 4.4% by the year’s end, a full point higher than envisioned in June.
Investors have been jittery ever since the US Federal Reserve’s latest rate hike.
* Global markets fall
Global shares were mixed Monday while the British pound declined to an all-time low against the US dollar on concerns over planned tax cuts.
France’s CAC 40 rose 0.2% in early trading to 5,795.88, while Germany’s DAX added 0.2% to 12,311.57. Britain’s FTSE 100 edged 0.1% higher to 7,025.51.
The futures for the Dow industrials and the S&P 500 were 0.1% lower.
In Asian trading, Japan’s benchmark Nikkei 225 shed 2.7% to finish at 26,431.55. Australia’s S&P/ASX 200 dipped 1.6% to 6,469.40. South Korea’s Kospi dropped 3.0% to 2,220.94. Hong Kong’s Hang Seng gave up 0.4% to 17,855.14, while the Shanghai Composite lost 1.2% to 3,051.23.
* Rupee at fresh lows
The rupee plunged to a fresh lifetime low against the US dollar amid foreign fund outflows, which further dented investor sentiment.
“Nifty fell for the fourth consecutive session driven by weak global cues and a falling rupee. Global risk assets including equities extended their selloff on Monday as fears of faster inflation and global recession continued to rise,” said Deepak Jasani, Head of Retail Research, HDFC Securities.
(With inputs from agencies)





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