A day after securing moderate gains, the Indian stock market went on a downward trajectory. The Indian Equity benchmark Sensex crashed by 1,100 points while Nifty, on the other hand, fell below 24,500 points.
The Sensex opened at almost 81,323 points compared to yesterday, it opened at almost 81,957 points and witnessed a massive drop of 1,100 points, which is more than 1%, to an intra-day low of almost 80,490 points. As of 2:50 pm, the Sensex lost 911 points and was down at 80,686 points. It lost 644 points and closed at almost 80,952 points.
If we look at the Nifty, it opened at almost 24,734 points compared to yesterday’s price, which closed at 24,813 points. It slipped down to almost 24,462 points during the intra-day trading around 2:50 pm. The Nifty lost 254 points and was down by 24,560 points, and it closed at almost 24,610 points. The BSE midcap index lost 0.64%; on the other hand small cap index was down by 0.16%.
But why are the markets down today despite making a considerable comeback yesterday?
The reason they’re down is because of the slowdown of the US Economy triggered by the actions of the US President’s Tax and Spending bill. According to Reuters, Trump’s tax bill is expected to be voted on this week, and if it is passed, it could add a $3.6 – 3.8 trillion debt pile. Another reason that the investors are anxious is because of the crisis in the Middle East. According to CNN, it is reported that US Intelligence has gathered information about Israel’s planning to strike Iranian nuclear sites; if this happens, it could directly make crude oil expensive and affect its supply. According to experts, weakness in indicators in recent months has completely deteriorated the earnings outlook. Kotak Securities stated that many high-frequency indicators have seen steady weakness in recent months. The earnings outlook has deteriorated across market caps and sectors, as seen in the steady cuts in consensus earnings.
The Q4 earnings have also failed to boost the markets as many mid-cap and large-cap firms gave mixed results, especially the consumer firms reporting weak prospects of growth, even the banking and it sectors showed signs of sluggish growth.
Let’s see what lies ahead for the markets.
