Mumbai
Domestic stock markets opened with a rise on Tuesday but there was a huge fall due to the fall in banking, financial and auto stocks. The market fell due to disappointing performance of companies on the earnings front and withdrawal of foreign investors. BSE Sensex closed at 78,675.18 with a fall of 820.97 points or 1.03%. Nifty 50 index also fell by 257.85 points or 1.07 points to 23,883.45 points. Due to this decline, the market cap of BSE listed companies decreased by Rs 5.76 lakh crore to Rs 436.78 lakh crore.
HDFC Bank, SBI, NTPC, Tata Motors, Asian Paints and Bajaj Finance were the biggest losers on the Sensex. There was a decline of 2-3%. HDFC Bank alone contributed 324 points to the overall fall in the Sensex. Dr. V.K., Chief Investment Strategist, Geojit Financial Services. Vijayakumar said that two strong factors are at work in the consolidating market. First, continued selling by FIIs has benefited the bears. This has pulled the market downwards. Second, continued buying by DIIs has supported the market. The key factors driving today’s selloff are:
1. Fall in Asian markets
Asian shares fell on Tuesday. This was due to the decline in Chinese markets and semiconductor stocks. Investors expressed concern over the policies of President-elect Donald Trump in America. Meanwhile, Bitcoin reached record high. It was expected that it would perform well in Trump’s second term. Markets are optimistic that a second Trump term will bring tax cuts and less regulation. This will promote equity. This optimism helped push Bitcoin to an all-time high of $89,637.
2. FII selling
On November 11, foreign institutional investors (FIIs) maintained their selling trend and sold equities worth Rs 2,306 crore. Meanwhile, so far in November, FIIs have sold equities worth Rs 23,547 crore while equities worth Rs 94,017 crore were sold in October.
3. Oil fluctuations
There was little change in oil prices on Tuesday. OPEC’s monthly report is expected to clear the way forward. Investor concerns over China’s new stimulus plan and oversupply issues weighed on sentiment. Brent crude futures rose 4 cents to $71.87 a barrel, while U.S. West Texas Intermediate crude futures fell 1 cent to $68.03 a barrel.
4. Fall in rupee
The Indian rupee reached its lowest ever level on Tuesday. Came under pressure due to the decline of the Chinese yuan and other regional currencies. The US dollar continued to rise after Donald Trump’s victory in the US elections. However, traders said possible RBI intervention helped stem the currency’s decline. The rupee touched a low of 84.40 per dollar in early trade, slightly surpassing its previous all-time low of 84.3925 in the previous session. It was last almost steady at 84.3950.
5. Inflation figures
Inflation figures will be released after the market is closed. Analysts expect October’s inflation figures to rise to around 5.8%, a 14-month high. This data is important because it can provide information about the state of the economy. This will decide whether the RBI will go ahead with a rate cut of 25 basis points in December or not.
