Benchmark Indices Fall 1% Amid Negative Global Trends and a Decrease in Foreign Investment
On Wednesday, the benchmark Sensex and Nifty equity indexes declined 1% due to persistent foreign money outflows and negative global market trends.
The United States government’s credit rating has been reduced by Fitch Ratings due to growing federal, state, and municipal debt as well as a “steady deterioration in standards of governance” over the previous 20 years.
On Tuesday, the rating was downgraded from AAA, the highest possible rating, to AA+.
To end the day at 65,782.78 the 30-share BSE Sensex fell 676.53 points, or 1.02 percent. It fell 1,027.63 points, or 1.54%, to 65,431.68 over the day.
The NSE Nifty ended the day at 19,526.55 after losing 207 points or 1.05 percent.
“Weak global market dynamics caused a wide sectoral decline in the Indian market. Worries were felt all around the world as a result of bad news on the US rating drop due to budgetary concerns and dismal manufacturing activity statistics from the Eurozone and China.
According to Vinod Nair, Head of Research at Geojit Financial Services, “prolonged FII selling, prompted by a rise in US bond yields, has disrupted the mood of the domestic market.”
Tata Steel dropped 3.45 percent from the Sensex pack, while Tata Motors dropped 3.19 percent. Among the other significant laggards were Bharti Airtel, NTPC, JSW Steel, State Bank of India, Larsen & Toubro, and Bajaj Finserv.
The winners were Nestle, Asian Paints, Hindustan Unilever, and Tech Mahindra.
“Amid weak global signals, markets traded under pressure and dropped more than 1%. After the initial decline, the Nifty continued to drift downward throughout the day and below the key support level of 19,500. The wider indexes also saw pressure and lost more than 1% apiece, according to Ajit Mishra, SVP – Technical Research at Religare Broking Ltd.
The BSE midcap gauge and smallcap index also saw declines in the wider market of 1.18 and 1.39 percent, respectively.
All indices finished lower, with metal down 2.45%, utilities down 2.32, power down 2.31, telecommunications down 2.0%, capital goods down 1.83, autos down 1.52%, oil & gas down 1.47, industrials down 1.46, financial services down 1.33, and commodities down 1.22.
A total of 2,353 stocks fell, 1,240 saw gains, and 139 saw no change.
Seoul, Tokyo, Shanghai, and Hong Kong had lower closing prices in Asian markets.
The markets in Europe were trading in the negative. Tuesday’s US stock market close was mostly negative.
According to exchange statistics, foreign institutional investors (FIIs) sold shares of stock on Wednesday totaling Rs 1,877.84 crore.
Benchmark Brent crude for all crude oil increased 0.80% to USD 85.59 per barrel.
The BSE benchmark dropped 68.36 points, or 0.10 percent, to close at 66,459.31 on Tuesday in a very erratic market. The Nifty finished at 19,733.55 after losing 20.25 points, or 0.10 percent.
