Sensex Down 2,500 pts in Seven Days, Leaves Investors Poorer by 10 L Cr; Why is Market Falling?

Bears were in tight grip of the Dalal Street in the past seven trading sessions. In this time, BSE Sensex has crashed from around 61,319 to 58,900 levels, logging around 2,500 points dip or 4 per cent loss in this time. The broader Nifty50, which also saw 7 days of non-stop selling, stooped below the Budget day low of 17,353.40.

Fear gauge index India VIX shot up another 5 per cent as selling was seen across sectors. Sectoral indices of IT, metals and media lost between 2-4 per cent each.

Santosh Meena, Head of Research, Swastika Investmart Ltd., said: “Nifty has slipped below its key support of 17350, which is its 200-DMA as well as the budget day’s low. However, we should wait for a close because if this breakdown is false, we can expect a short covering move. There is a sharp divergence between the Nifty and Banknifty today, with Banknifty showing decent strength while the Nifty is under pressure. BankNifty is a leading indicator in general, and the market is oversold based on FIIs’ short exposure and PCR, so we should wait for the day’s close. However, if Nifty does not recover, then 17130 is the next target level.”

US Fed meeting in focus

Speaking on the reason for dip in Sensex and other benchmark indices, Anuj Gupta, Vice President — Research at IIFL Securities said, “Sensex and other key benchmark indices are falling for the last seven sessions because of the rising US dollar rate. In last seven sessions, US Dollar Index has risen above 105 levels and it may go up to 107 levels in near term. Major reason for US dollar gaining strength is rising US inflation concern after stronger than expected US economic date in recent weeks. This has raised concerns of US Fed officials and they are dropping hint to raise US Fed interest rates by 25 bps in upcoming three US Fed meetings.”

Global Markets

Indian markets are reflecting bearish sentiments dominating global markets. The Dow Jones fell 3% last week in its fourth straight weekly decline. Asian markets were under pressure this morning, with Nikkei down 0.2%, Hang Seng lost 0.8% and Australia’s S&P/ASX 200 shed 1.3%.

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