Why Is Stock Market Falling Today? Domestic benchmark indices opened in the red on Thursday as a four-day fall in US stocks, thanks to rate hike worries spooked Indian investors. Even a 13.5 per cent growth in June quarter GDP failed to offer support to the indices.
At 2 pm, the Sensex was down 965.98 points or 1.62 per cent at 58,571.09, and the Nifty was down 268.30 points or 1.51 per cent at 17,491. The market capitalisation of all listed companies on BSE declined by Rs 3.52 lakh crore to Rs 276.713 lakh crore from Rs 280.21 lakh crore.
Santosh Meena, Head of Research, Swatika Investmart Ltd., said: “The Indian equity markets are witnessing high volatility as global cues are weak but our market is not ready to go down where every dip is taken as a buying opportunity. FIIs are in a buying mood despite the rise in the dollar index and US bond yields whereas the rupee has gained remarkably in the last two trading sessions.”
US Selloff
While the domestic market was closed on Wednesday on account of Ganesh Chaturthi, US stocks continued a downward slide for the fourth session as all three major Wall Street indices ended in the red. On Thursday, S&P500 futures were trading 0.70 per cent lower at the 3,928 level, signalling another day of weak start for Wall Street stocks.
Weak Global Cues
European markets made a negative start to the new trading month as traders grapple with fears of higher interest rates and a looming economic downturn. The pan-European Stoxx 600 fell 1.1 per cent in early trade, with basic resources shedding 3 per cent to lead to losses as all sectors and major bourses slid into the red.
Asian shares were also trading mostly lower, tracking the broad slide on Wall Street, as investors braced for higher interest rates and inflation worries for some time. Benchmarks fell in Tokyo, Sydney, South Korea, and Hong Kong in early trading, but edged up slightly in Shanghai. Weak global cues dampened investors’ sentiment in India.
Japan’s benchmark Nikkei 225 declined 1.5 per cent in morning trading to 27,673.14. Australia’s S&P/ASX 200 dropped 1.7 per cent to 6,865.60. South Korea’s Kospi shed 1.7 per cent to 2,429.75. Hong Kong’s Hang Seng lost nearly 0.8 per cent to 19,799.92, while the Shanghai Composite edged up 0.3 per cent to 3,212.96.
IT Stocks See Profit Booking on Weekly F&O Expiry
Nifty IT index falls about 2 per cent, followed by the Nifty Metal index, which eased 1 per cent. On the upside, the Nifty PSU Bank index added over 1 per cent, and the Nifty Auto and Realty indices advanced 0.8 per cent each.
Weak factory activity
Asia’s factory activity slumped in the month of August as China’s zero Covid curbs and cost pressures continued to hurt businesses, surveys showed on Thursday, darkening the outlook for the region’s fragile economic recovery. Manufacturing activity was weak in countries ranging from Japan, China, and South Korea to Taiwan in a sign sluggish demand was adding to headaches for companies already suffering from lingering supply constraints.
Nifty Technical Outlook
Bears continued mayhem on Dalal Street as Nifty 50 slipped below crucial support 17,550.
Meena said: “17,160 is the previous swing low, 17,000 is 200-DMA, and 16,920 is a 38.2 per cent retracement of the previous rally therefore 17,160-16,920 is a critical demand zone. On the upside, 17,800-18,000 is an immediate supply zone; above this, the Nifty will prepare itself for new highs.”
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