Stock Market Fall: More than Rs 11.23 lakh thousand crores of investors were sunk in just two days.
Why Stock Market Fall Today: The first trading day of this week was a heavy fall for the domestic equity benchmark indices. There was a fall of about 1 per cent in early trade and in no time the Sensex and Nifty 50 slipped by about 3 per cent. Today (December 20) the sharp slippage of the stock market has wiped out lakhs of crores of investors and if the last trading day of last week i.e. one trading day before the fall is also added, then the amount of more than Rs 11.23 lakh crore of investors is only He drowned in two days. On Friday, the Sensex and Nifty had fallen by about 2 per cent. The main reason for this panic in the market is the new variant of the corona virus, policy strictness and the withdrawal of foreign capital.
India Volatility Index i.e. the index indicating market volatility (India VIX) is up about 12 percent today. Which is testifying that the Indian stock market is in the grip of bears today. The chaos continues on Dalal Street. All sectoral indices of Nifty are showing a decline. Bank Nifty has broken about 4 percent, then Nifty PSU Bank and Nifty Realty have lost more than 5 percent.
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These three reasons created a stampede situation in the market
- The new Omicron variant of the corona virus has raised apprehensions in the minds of investors. Due to this, strictness is being taken in many countries of Europe. Restrictions have been imposed in many countries including England. In such a situation, there is panic in the minds of investors.
- The US Federal Reserve announced last week that it would reduce monthly bond purchases by more than double the rate before and would end it by March 2022. According to the Fed, the benchmark short-term rate will be increased three times next year. After the US Fed, it is being speculated that the central banks of other countries can also increase rates in the fight against inflation. Let us inform that at the beginning of this month, the Indian central bank RBI has kept rates stable for the ninth time in a row.
- Due to the policy of raising rates of central banks in developed countries like America, Foreign Institutional Investors (FIIs) are withdrawing capital from developing countries like India. So far in December, FIIs have withdrawn more than 26 thousand crore rupees from the cash market, which is the biggest withdrawal of this year. However, domestic investors have invested Rs 20041 crore this month.
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Nifty’s next support level is at 16,300: JM Financial
The next level of support in Nifty is seen at 16,300. While the minor support is also at the level of 16,500. This is to say of Rahul Sharma, Director & Head – Research, JM Financial, JM Financial. He believes that if the support of 16,500 is not broken in the midst of today’s fall, then some short covering can be seen in the second half of the trading day. Rahul believes that the month of December is going to be in the grip of bears overall. But if the quarterly results are good in January, once again there can be a bullish phase. In the current environment, Rahul is advising traders to be careful till the market stabilizes. While the support level of 16,300 can provide buying opportunities for investors.
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Investors need to be careful: Mehta Equities
According to Prashant Taapsee, Vice President (Research), Mehta Equities, as long as there are risks to inflation and Omicron, investors need to be careful as the economic recovery is going to be volatile rather than straight. According to Taapsee, Nifty can get support in the 15871-16000 zone this week and as of today, it is getting some support at the level of 15359. Taapsee said that if Nifty reaches the level of 16900-17000 this week, then it will be a better opportunity to lighten its leveraged long positions.
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