The Indian stock market has fallen 10 percent below the all-time high level of 26,277 in its NSE Nifty 50 index. The market had achieved this level on 27 September 2024. On Wednesday, Nifty fell 374 points to the day’s low of 23,509. After which the closing fell by 1.36 percent at 23,559. At the same time, BSE Sensex also fell by more than 1,100 points to reach the day’s low of 77,533 and then closed at 77,690.95.
big sign
With this, the benchmark Nifty 50 index fell below the 200-day moving average for the first time in 20 months, indicating a cautious attitude of investors and a possible change in the near-term direction of the market.
Major reasons for the decline?
The market’s slide continued for the 5th day amid sustained selling by foreign institutional investors (FIIs), while market sentiments were affected by a combination of factors, which has shaken investor confidence. From the beginning of this month till November 12, FIIs have sold Rs 23,911 crore while DIIs have bought Rs 10,210 crore.
The correction reflects growing investor caution amid high valuations and macroeconomic uncertainties, with Nifty and Sensex hitting their respective five-month lows today. According to experts, this latest decline was accelerated by continued selling by foreign investors, weak corporate earnings and rising inflation. Since the end of September, foreign investors have sold about $14 billion from Indian stocks.
Corporate earnings also failed to reassure markets, with many companies reporting their weakest quarterly performance in four years. Apart from this, retail inflation reached a 14-month high of 6.21 percent in October, dealing a blow to the hopes of an early interest rate cut by the Reserve Bank of India.
Apart from this, with the expiry of the weekly Bank Nifty derivatives contract, traders are likely to liquidate their positioning, which may increase pressure on banking stocks.
When will recovery come?
Market expert Raghavendra Singh says that there is scope for recovery in the market from the level of 23,200. If these levels also break then the market will directly fall to 21300. If we talk about Bank Nifty, if the level of 50,000 is broken then this selling will increase further.
Where is the greatest impact?
The worst-hit sectors included BSE Oil & Gas and Energy indices, which each declined more than 19 per cent, followed by Realty and Telecom sectors, which declined more than 16 per cent from their highest levels. of. BSE Auto index and Power fell by 15.7 per cent and 14.6 per cent, while Services and Utilities also declined by more than 14 per cent from their 52-week highs. The BSE PSU index fell more than 15 per cent, while the BSE SME IPO and BSE IPO indexes fell 13 per cent and 10 per cent, respectively, from their 52-week highs.