The Indian markets were down today. If we look at the Indian benchmark indices, they, along with the global stocks, have fallen today because Moody’s reduced credit rating on the United States sovereign bonds, which had a direct effect on tech stocks as they get their maximum revenue from the US.
The Nifty was down at 24,495.45 points, approximately, it fell by 0.3%, and if we look at the BSE Sensex, it was down by 0.33% at 82,059.42 points. The domestic mid-cap and small-cap shares were performing relatively well today. The top losers of the day were IT companies with the likes of Eternal, Tech Mahindra & Infosys.
But why are the markets facing this drag? The reason that they’re facing drag is that Moody’s has reduced its credit rating for the US government from AAA to AA1, citing concerns about the rise in the country’s debt and deficit. This directly affected the domestic IT companies that get their major chunk of revenue. This news completely shook the IT companies today, and they almost lost 1.3%, which contributed to the fall in the indexes.
However, if we look, look at the domestically concentrated small and midcaps they fared quite well, the Small-cap grew by approximately 0.5% on the other the mid-cap grew by 0.1%.
According to the experts, markets are likely to remain resilient. Sunny Agarwal, the Head of Fundamental Equity Research at SBICAP Securities, said that the broader market is likely to churn as investors are buying infrastructure, real estate and other rate-sensitive stocks. He further added that strong earnings have also come from selected companies.
Another reason the market has remained mainly strong is because of lower inflation, which is below 4% for the third consecutive term, and this has prompted investors to invest more in the markets as they are expecting strong interest cuts from the RBI. Cooling inflation has also had a positive effect on real estate stocks have also jumped by 2.3%.
If we look at the overall growth, the market has gone on an upward trajectory, and the Nifty and the Sensex have risen by 5.5% and 5% respectively since their last big fall.
