November 29, 2021

The World Stock Markets Tips & Targets, News, Views & Updates

The World Stock Markets Tips & Targets, News, Views & Updates

Sensex crashes 1,170 points: Top reasons for the fall

NEW DELHI: Equity indices plunged on Monday with the benchmark BSE sensex crashing over 1,100 points amid broad-based selling across all sectors.
The 30-share BSE index tanked 1,170 points or 1.96 per cent to close at 58,466; while the broader NSE Nifty settled 348 points or 1.96 per cent lower at 17,417.
Top losers in the sensex pack included Bajaj Finance, Bajaj Finserv, Reliance, NTPC, SBI and Titan with their shares falling as much as 5.74 per cent. Twenty-six out of 30 shares ended in red.
While Bharti Airtel, Asian Paints, Power Grid and IndusInd Bank were the only gainers rising up to 3.7 per cent.
On the NSE platform, all sub-indices ended in red with Nifty PSU Bank, Realty, Oil & Gas and Auto being the major losers falling as much as 4.51 per cent.
Here are the top reasons for today’s crash:
* Heavy selloff across sectors
All sectoral indices finished lower with banking and financial stocks tumbling the most.
Bajaj Finance, Kotak Bank, SBI, Bajaj Finserv among other banking stocks were the top drags on the sensex pack.
“Finally the bears got their act together after a long wait as a series of events over the weekend gave them the upper hand with almost all the sectoral indices barring the metal index plunging,” said S Ranganathan, Head of Research at LKP Securities.
The repealing of the agriculture laws had an impact on the PSU stocks while the O2C deal not going through left a 4.5 per cent cut on Reliance, he noted.
Further, he said that even as IPO investors come to terms with the reality, the inflationary impact on demand across several sectors continues to worry the street.
* Reliance shares hit their lowest in 2 months
Shares of Mukesh Ambani-led Reliance Industries fell as much as 4.42 per cent to its lowest level in over two months, after the company 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.
It said its energy portfolio has changed with the foray into a new energy business, which would require a re-evaluation of the deal.
The conglomerate dragged Nifty’s Energy Index 3.35 per cent lower.
“Reliance shares are mainly driving the indexes down,” Kshitij Purohit, senior manager at CapitalVia Global Research Limited told news agency Reuters.
* Paytm fell for 2nd day
Digital payments firm Paytm fell as much as 13.03 per cent in its second day of trading.
India’s biggest IPO got off to a muted start on Thursday as it tanked over 27 per cent on its debut at the bourses.
According to market analysts, concerns over valuation weighed on the stock.
Ant Group-backed Paytm’s Rs 18,300 crore IPO, India’s biggest share sale, was oversubscribed 1.89 times earlier this month.
* Fresh Covid lockdowns
With Austria starting its fourth full lockdown and Germany considering the same, there is a growing concern among investors over the impact of new Covid restrictions in Europe.
As a result, the euro closed at a 16-month low on Monday.
Austria began its fourth lockdown, the first introduced since vaccines became widely available, shutting Christmas markets, bars, cafes and theatres.
A fourth wave of infections has plunged Germany, Europe’s largest economy, into a national emergency, Health Minister Jens Spahn said, warning that vaccinations alone will not cut case numbers.
“Nifty has corrected around 4.5 per cent from the all-time high. The risk-off mood in global markets may gather strength on fresh Covid cases in Europe and lockdowns in countries like Austria,” VK Vijaykumar, Chief Investment Strategist at Geojit Financial Services told news agency PTI.
* Subdued global cues
Global stocks made a wobbly start to the week as the return of Covid-19 restrictions in Europe and talk about hastened tapering from the US Federal Reserve cautioned investors.
The rouble fell past the 74 mark to a near three-month low against the dollar on Monday and Russian stocks sunk to their lowest since the start of September as lingering geopolitical risks hampered demand for Russian assets.
* Inflation fears
Asian markets were mixed on Monday with fears about renewed containment measures to battle a surge in European Covid cases adding to growing speculation that central banks will have to tighten monetary policy quicker to tame a spike in inflation.
* Rising crude oil price
Oil extended losses as major consumers including the United States considered releasing some of their reserves to keep a lid on prices, which have been a key reason for the jump in inflation this year.
Both main contracts fell again as discussions come after WTI crude last month hit a seven-year high above $80 on rising demand and limited supplies.
(With inputs from agencies)

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