Indian equity benchmarks Sensex and Nifty50 fell over 1% on Tuesday, weighed down by weak global cues, profit booking, and cautious sentiment among institutional investors.
Indian equity benchmark indices, Nifty50 and BSE Sensex, tanked in trade on Tuesday afternoon, influenced by subdued global market conditions, selling pressure, and reserved approach from institutional investors.
The BSE Sensex dropped 873 points, or 1.06%, to close at 81,186, while the NSE Nifty declined 261 points, or 1.05%, to end at 24,683.
The Sensex closed with a loss of over one percent to settle at 81,186, while Nifty slipped by a percent to end at 24,683.
The broad-based selloff was marked by Auto, Healthcare and Financial Services among the worst performers. The broader market indices too were under pressure, with the Nifty Midcap 100 down 1.6 percent and Nifty Smallcap 250 lower by 0.9 percent.
Investor mood soured amid a fresh surge in Covid-19 cases across Southeast Asia, particularly in high-density regions like Hong Kong, Singapore, China, and Thailand. Moody’s downgrade of the US credit rating further weighing on global risk appetite.
Stocks of major companies like HDFC Bank, Reliance Industries and ICICI Bank declined.Market experts indicated that investors engaged in profit-taking whilst awaiting additional information regarding the the India-US trade agreement.
According to Vinod Nair, Head of Research at Geojit Investments Limited, market participants exercised restraint whilst awaiting information More about the India-US trade agreement.
Below Are the Main Reason for Crash Market#
1. Market Correction Following Strong Performance:- This correction came as valuations reached high levels,The Indian markets experienced a pullback after a substantial 4% gain After Operation Sindoor ceasefire.
2. Impact of Major Stocks’ Performance:- The market indices declined due to selling in prominent companies Like: HDFC Bank, Reliance Industries, ICICI Bank, M&M, Maruti, and Bajaj Finance.
3. US Government Rating Downgrade by Moody’s:- Market React on Moody’s decision to lower the US government’s credit rating to Aa1 from AAA,citing increasing debt worries.
4. Institutional Investment Shifts:- Foreign Institutional Investors (FIIs) demonstrated caution by withdrawing Rs 526 crore on May 19, whilst DII also reduced holdings by Rs 238 crore.
5. Nifty Indicators:- The index displayed weakness on 20th May when it couldn’t sustain above 25,000 and declined below the crucial support range of 24,900-24,800