Nifty 50 to Sensex: Why Indian stock market fell on Wednesday — explained with six reasons
- Sensex has fallen more than 1,000 points in the last two straight sessions
Indian stock market on Wednesday opened with a gap up but profit booking at higher levels dragged Dalal Street into the red territory by noon. In fact, all three key benchmark indices and broad market witnessed sharp sell off during Wednesday deals.
BSE Sensex opened at 64,619 and went on to hit intraday high of 64,787 mark. However, the 30-stock index witnessed sharp selling at higher levels and hit intrday low of 63,912 levels, losing to the tune of near 1500 points in last two sessions.
Likewise Nifty 50 opened higher but soon came under sell off heat. Nifty today breached its crucial 19,200 support and hit intraday low of 19,074 mark, logging over 450 points loss in last two sessions. Bank Nifty also slipped below 43,000 levels and lost near 900 points in this truncated week.
Participatory selling
Broad market too witnessed heavy sell off as small-cap index lost near 1.45 per cent during Wednesday deals. The small-cap stock has lost around 2,330 points in this week whereas mid-cap index has corrected near 1,240 points in this time.
According to stock market experts, Indian stock market today witnessed some buying interest as 10-year US treasury yield had retraced from 16-year higher levels and had came below 5% levels. However, the US bond market is again showcasing buying interst as 10- year US Treasury yield has suged again and it has come close to 5% levels once again. They said that Israel-Hamas war, strong US dollar, FIIs' selling, Q2 results 2023 coming below estimates and rising inflation concerns are some other triggers that have dragged Indian stock market in red territory today.
US Treasury yields in focus
Speaking on the reasons that has been dragging Indian stock market for the last five sessions, Avinash Gorakshkar, Head of Research at Profitmart Securities said, “Rising US Treasury yields are putting pressure in global equity market and India's Dalal Street is not an exception to it.”
Ainash Gorakshkar went on to add that 10-year US Treasury yield had retraced from 16-year higher levels and had come down below 5 per cent levels. However, the US bond market is once again witnessing buying interest of investors, which triggered profit booking at Indian stock market. This is the reason for Indian stock market drifting into the red terriroty after gap up opening.
Israel-Hamas war
Pointing towards the Middle East tension, Arun Kejriwal, Founder at Kejriwal Research and Investment Services said, "The Middle East tension has created an environment of uncertainty and this has put confusion among global stock market invstors including Dalal Street.
Rising US dollar
Avinash Gorakshkar of Profitmart Securities went on to add that US dollar has once again regained its mojo as the US dollar index has reclaimed the psychgological 106 levels after breaching below ₹106 levels during morning deals on Wednesday. This has also triggered profit booking on higher levels in Indian stock market.
Rising inflation
Profitmart Security expert went on to add that rising crude oil prices are also a concern for Indian stock market as it would raise inflation in India if the crude oil continues to remain in uptrend due to Middle East tension. He said that India imports near 85 per cent of its demand for crude oil and hence rising crude price is a sign of danger for Indian inflation and economy.
FIIs' selling
Gorakshkar went on to add that FIIs have been continuously selling in Indian equity market as US dollar has been rising continuously in last few weeks. In such a scenario, they might be shifting their money from emerging markets to other assets like gold, bond, currency, etc.
Weak Q2 results 2023
Experts maintained that big companies like DMart, TCS, Infosys, etc. have reported weak Q2 results 2023 whereas good Q2 results of ICICI Bank, Kotak Mahindra Bank, etc failed to attract investors as if they are not much impressed by Q2 results as they were during Q1 results 2023.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
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