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Decoding the market crash: Why Sensex fell over 1,600 points today

Decoding the market crash: Why Sensex fell over 1,600 points today

While Sensex lost 1,625 points to 58,011, Nifty fell 484 points to 17,280 on an intra day basis. Later, Sensex closed 1,170 points lower at 58,465 and Nifty fell 348.25 points to 17,416.

Later, Sensex closed 1,170 points lower at 58,465 and Nifty fell 348.25 points to 17,416. Indian equity market has closed lower for the fourth consecutive trading session. Later, Sensex closed 1,170 points lower at 58,465 and Nifty fell 348.25 points to 17,416. Indian equity market has closed lower for the fourth consecutive trading session.

Sensex crashed over 1,600 points and Nifty shed nearly 500 points during today's session amid mixed global cues. While Sensex lost 1,625 points to 58,011, Nifty fell 484 points to 17,280 on an intra day basis. Later, Sensex closed 1,170 points lower at 58,465 and Nifty fell 348.25 points to 17,416.

Indian equity market has closed lower for the fourth consecutive trading session. During the last four sessions, Sensex has lost 2,253 points and Nifty is down 693 points.

In one month, Sensex has slipped 2,355 points (3.87%) and Nifty has fallen 698 points (3.86%), signaling profit booking from record peaks. On October 19 this year, Sensex hit all-time high of 62,245 and Nifty scaled record peak of 18,604.

Since then, Sensex has lost 3,600 points and Nifty has declined 1,188 points.

Here's a look at five factors that weighed on the market sentiment today.

Selling by FIIs : Foreign institutional investors (FIIs) sold shares worth Rs 3,930 crore on November 18 (last trading session), the most this month reflecting waning interest for Indian equities for the market participants. FIIs have sold equities worth Rs 9,999 crore this month preceded by a Rs 25,572 crore selling in October. On the other hand, domestic institutional investors (DIIs) bought shares worth Rs 1,885 crore on November 18, as per data available on NSE.

Also read: Sensex tanks 1,000 points, Nifty below 17,500; RIL, Bajaj twins top losers

Profit booking in banking, consumer durables shares: Investors booked profit in banking and consumer durables stocks during the session.

BSE consumer durables index tanked 2,055 points intra day to 42,641 against previous close of Rs 44,696. BSE bankex slipped 1,536 points intra day to 41,787 against previous close of 43,323. The crash in these two sectors further dampened market sentiment during the first session of this week.

Weakness in Reliance Industries stock: Reliance Industries share fell nearly 5% intra day after the Mukesh Ambani-led conglomerate said last week it had decided with Saudi Aramco to reevaluate a proposed $15 billion stake sale in its oil-to-chemicals arm to the Saudi oil producer.

RIL share lost up to 4.92% to Rs 2,351 against previous close of Rs 2,472 on BSE. Later it ended 4.42% lower at 2,363.  The negative sentiment for the market heavyweight proved to be a drag on the benchmark indices in trade today.

Technical outlook: Gaurav Garg, Head of Research, Capitalvia Global said,"Our research suggests that the 58,200-58,500 levels may act as an important support in the market. If the market is unable to sustain the level of 58,200-58,500, we can expect the selling pressure till 57,900."

Amit Gupta, Fund Manager - PMS, ICICI Securities said, "With the recent correction, markets have entered into the consolidation phase where stock specific volatility can be utilised to form the equity portfolios. The stretched valuation segments are witnessing profit booking and money is flowing into value segments where earnings have started to grow after several quarters of stagnation."

Repealing of farm laws: The unexpected announcement of repealing of the three farms laws by the Modi government during the weekend also fuelled negative market sentiment since they were deemed appropriate by many analysts for the progress of agricultural sector.