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Indian stock markets and the rupee fell sharply today amid weak global cues before paring some losses. The Sensex ended 410 points lower after falling 1,000 pts intra-day. Sensex fell over 1000 points at day's low of 59,045 before staging an intra-day recovery in late trade. Meanwhile, the rupee weakened to one-month low of 74.07 against the US dollar as compared to Monday's close of 73.83 against the greenback.  The broader Nifty ended 0.6% lower at 17,748, off its day's low of 17,576.

Here are key things to know about today's market selloff

"The Nifty was a roller coaster ride today! The index took support at the 17500 level and bounced sharply from there. The trend is still positive and dips like these can be strategically utilized to enter long positions. If the markets move higher from here, it should scale up to 17950-18000," said Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments.

Analysts attributed the selloff in Indian markets to profit-taking and weak global cues. Vinod Nair, Head of Research at Geojit Financial Services, said: “Following negative global cues and profit booking in IT and realty sectors, the domestic market hit rough weather. However, it witnessed a rebound towards the closing. Rise in US bond yield and crude oil price along with the Chinese crisis acted as key headwinds to the ongoing rally in the global market."

Santosh Meena, Head of Research, Swastika Investmart, said: “The market saw a correction after a vertical rise near to the psychological levels of 18000 and 60000 for Nifty and Sensex respectively. Brent crude is above $80 per barrel, the Dollar index is above 93.5, and the US 10 year bond yield is near to 1.5 mark. These are the multiple triggers that are pushing bulls on the back foot after a long period of the party. Our market was outperforming most of the global peers for a long time but rising Crude oil prices may lead to some mean reversion. India VIX is also crossing its 200-DMA which is also indicating a sign of a short-term correction furthermore lack of FIIs buying is visible post-US Fed meeting."

“Short-term traders are advised not to hurry to buy the dip but they are advised to be ready with the list of quality stocks where 16700 will be the first level to deploy your 60%-70% cash while 16000 will be the best level to deploy your 100% cash," he added. 


Oil prices today rose more than 1% to extend a recent rally on demand expectations and worries about supplies, with Brent breaking $80 for the first time in three years.

“Rise in US 10-year bond yield is a negative for emerging markets like India, particularly if this trend sustains and gathers momentum, going forward. Rise in Brent crude to $80 is a negative for India's macros," says V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

There is profit booking in IT since the segment has given excellent returns of 82 percent one-year return. Markets might consolidate for a while before making a decisive move," he added.

The Nifty IT index fell over 2% with TCS, Wipro, HCL Tech and Infosys declining between 1.5% and 2.2%. 

Trading was slightly volatile today, with the Nifty volatility index surging 2.7%. Among financials, ICICI Bank, Bajaj Finance, Bajaj Finserv and IndusInd Bank fell between 1.5% and 2%. 

The US dollar today rose to its highest in more than five weeks against a basket of other currencies. US Treasury yields have surged since the end of last week, after the Federal Reserve said it will likely begin reducing its monthly bond purchases as soon as November and hinted that interest rate hikes may follow more.

Goldman Sachs today lowered its annual economic growth forecast for China as nationwide power cuts hit millions of homes and halted production at factories, including some supplying Apple and Tesla. 

(With Agency Inputs)


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