Stock Market LIVE: Sensex Crashes Over 700 Points, Nifty Slips Below 25,950 as Realty, PSU Banks Drag
Sensex plunges over 700 points and Nifty slips below 25,950 as broad market selling hits realty, PSU banks, and financials ahead of key global rate decisions.
Sensex and Nifty tumble sharply on Monday as realty, PSU banks and broader markets witness heavy selling amid global rate-cut concerns.
The Indian equity markets marked a very negative start to the week, as the main indices went down significantly due to the overall selling pressure. The Sensex fell over 700 points, while the Nifty 50 went down under 25,950, which indicated the sword of great caution hanging over the market in the run-up to a heavy IPO calendar and the U.S. Federal Reserve rate decision that was expected to come at the end of the week.
The RBI policy of the last week was already digested by traders, who moved their attention to the global economy, particularly to the Fed, which is thought to be the instigator of the next rate cut, thus letting the liquidity condition decide the rally days of the market.
All the sectoral indices were in the red zone with metals, real estate, public sector banks, financials, FMCG, automotive, pharmaceutical, and metals being the main sectors that suffered and showing that the whole market is weak. The only ones that contributed to the support of the indices were IT and media stocks whose support was very small anyway.
Dips in mid and small caps were similar and reflected the broad market risk-off mood.
The global markets sent mixed signals; the U.S. futures were slightly up, while the Asian markets had varied movement with the Japanese Topix gaining and the Hong Kong Hang Seng losing. The European futures started lower, thus increasing the prevailing caution.
In the spotlight, IndiGo's shares fell about 8% as a result of flight cancellations and disruptions all over; Kesoram Industries reached the 20% upper circuit limit after it was reported that a significant stake acquisition had taken place; and Kaynes Technology was undergoing a steep multi-day fall as investors were worried about the issues raised in the financial disclosures.
Volatility in the markets increased with India VIX going up by 11%, thus indicating that there was an increase in fear among the traders.
The overall market feeling was still split between the positive side of the economy recovery — which was backed by the strong GDP growth — and the negatives which were still persistent, the most significant being the rupee's continued depreciation, and thus the foreign institutional investors (FIIs) resorting to outflows, which are to a certain extent, the same as the FII outflows.
