Sensex Cracks 950 pts, Investors Lose Rs 3.5 Lakh Crore; Why is the market falling today?

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Why is the stock market falling today? National benchmarks opened in the red on Thursday as a four-day decline in U.S. stocks on concerns over rising rates spooked Indian investors. Even 13.5% GDP growth in the June quarter failed to support the indexes.

At 2 p.m., the Sensex was down 965.98 points or 1.62% at 58,571.09, and the Nifty was down 268.30 points or 1.51% at 17,491.

Santosh Meena, Head of Research at Swatika Investmart Ltd. said: “Indian equity markets are experiencing high volatility as global signals are weak but our market is not ready to fall where every dip is seen as an opportunity. of purchase. FIIs are in a bullish mood despite rising dollar index and US bond yields as the rupiah gained remarkably over the past two trading sessions.

US Clearance

While the domestic market was closed on Wednesday due to Ganesh Chaturthi, US stocks continued to fall for the fourth session as all three major Wall Street indexes ended in the red. On Thursday, S&P500 futures were trading down 0.70% to the 3,928 level, signaling another weak start day for Wall Street stocks.

Weak global indicators

European markets started the new trading month on a negative note as traders grappled with fears of higher interest rates and an impending economic slowdown. The pan-European Stoxx 600 fell 1.1% at the start of trade, with basic resources losing 3% to lead losses as all sectors and major exchanges slipped into the red.

Asian stocks were also trading mostly lower, following the broad decline on Wall Street, as investors braced for higher interest rates and inflation concerns for some time. Benchmarks fell in Tokyo, Sydney, South Korea and Hong Kong in early trading, but edged higher in Shanghai. Weakness in global indices dampened investor sentiment in India.

Japan’s benchmark Nikkei 225 was down 1.5% in morning trade to 27,673.14. Australia’s S&P/ASX 200 fell 1.7% to 6,865.60. The South Korean Kospi fell 1.7% to 2,429.75. Hong Kong’s Hang Seng fell nearly 0.8% to 19,799.92, while the Shanghai Composite edged up 0.3% to 3,212.96.

IT stocks see profit booking on weekly F&O expiry

The Nifty IT index is down about 2%, followed by the Nifty Metal index, which is down 1%. On the upside, the Nifty PSU Bank Index gained more than 1%, and the Nifty Auto and Realty Indexes rose 0.8% each.

Low factory activity

Asian factory activity slumped in August as Covid zero restrictions and cost pressures in China continued to hurt businesses, surveys showed on Thursday, darkening prospects for the fragile recovery economy of the region. Manufacturing activity was weak in countries from Japan, China and South Korea to Taiwan, a sign that weak demand was adding to the headaches of companies already suffering from lingering supply constraints.

Clever technical insights

The bears continued the mayhem on Dalal Street as Nifty 50 slipped below crucial support at 17,550.

Meena said, “17,160 is the previous swing low, 17,000 is 200-DMA and 16,920 is a 38.2% retracement of the previous rally, so 17,160-16,920 is a critical demand area. On the upside, 17,800-18,000 is an immediate supply zone; above that, the Nifty will prepare for new heights.

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