The BSE Sensex has lost around 2500 points whereas NSE Nifty has dipped near 700 points in the previous four sessions
Listen to this article
Stock market today continued to fall for the fourth straight trading session with the BSE Sensex declining around 2500 points whereas NSE Nifty has dipped near 700 points during the period. According to market experts, weak rupee and FIIs fishing out money from the Indian markets have worked as major triggers for trend reversal and now corporate performance not coming as expected by Dalal Street has further cemented the bears grip on the markets.
They further added that due to the 5 state elections, market is expecting populist budget and it is also working as morale booster for bears against bulls, which can be some of the major reasons leading to sharp dip in the markets.
"Foreign Institutional Investors (FIIs) fishing out money and weaker Rupee have worked as major triggers. Corporate performance announced by the companies of big repute like CEAT, Asian Paints, etc. have also come below expectation. There is strong speculation that there will be populist budget coming on 1st February 2022 as the central government may try to win hearts of 5 states going to polls immediately after the budget presentation," said Avinash Gorakshkar, Head of Research at Profitmart Securities.
Stocks market experts listed out following reasons that is behind the decline in indices -
1] FIIs behind bears: Till 20th January 2022, FIIs have remained net seller to the tune of ₹12,415.14 crore whereas they have sold more than ₹4,500 crore on 21st January 2022. These FIIs include Foreign Portfolio Investors (FPIs) too and this is also not allowing the market selloff to stop.
2] Rupee vs dollar: In last one fortnight, Indian Rupee has fallen from 74 levels to around 74.50 levels, which is also a reason for FIIs fishing out money from the Indian markets as their return in dollar terms will go down drastically in this bear ridden market.
3] Below par corporate performance: Corporate results announced by market majors like CEAT, Asian Paints, etc. have been unable to meet the market expectations and this is also a reason why bulls are unable to take over from bears.
4] Global inflation: Soaring global inflation is another concern that may put global economy under heat as crude oil prices have been surging sharply and it is expected to hit $100 in near term. In that case, most of the global economies may not remain away from the heat of rising inflation. In that case, investor may look at other asset class like gold and to some extent crypto as well.
5] Populist budget: Market is buzzing with reports that upcoming Union Budget 2022 will be a populist budget as 5 state assembly elections are taking place immediately after the budget presentation and central government may try to win hearts of these state citizens in this budget.
"Nifty is currently trading in a broader range of 17,300 to 18,000 where 17,500 is working as immediate support while 17,800 can be considered as immediate resistance. Similarly, BSE Sensex is trading in 58,100 to 60,000 range where 58,500 is immediate support and 59,500 is immediate resistance." advised Sumeet Bagadia, Executive Director at Choice Broking.
Likewise, Bank Nifty index is trading in a broader range 36,700 to 38,300 where 37,000 is immediate support and 36,700 is strong support and 38,000 is immediate resistance and 38,300 is strong resistance, Bagadia added.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.