Stock Market: The day of Friday in the Indian stock market also went downhill. Due to this fall for the fourth consecutive day, investors have been hurt for a long time. There was a sell-off in the market. In these 4 days, the Sensex fell by 2,271.7 points by 3.7 percent and the Nifty50 lost 691 points or 3.8 percent. During this, a total of Rs 10.4 lakh crore of investors were sunk. On the other hand, there was a decline in all the indices including Nifty Midcap, Small Cap.
The market cap of BSE listed companies has come down from Rs 280 lakh crore to Rs 269.7 lakh crore. Both the indices were down 1 per cent from their all-time highs on October 19 before continuing to be sell-offs.
Know why there was pressure in the market
The new variant of the corona virus, Omicron, has created an atmosphere of concern all over the world. Selling in the Indian market by foreign investors and the rise in crude oil prices spoiled the mood in the market. Due to which there was a fall in the market. VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said in a note, “The US markets continued to remain weak for the fifth day in a row, with the decline in Nasdaq’s tech heavyweights. Its impact is also visible on India’s tech sector, which has a huge weakness.
Global market
The effect of the fall in the US markets is visible on the Indian market, where there was weakness on Thursday for the fifth consecutive day. A jump in global bond yields in anticipation of an interest rate hike by the US Federal Reserve has forced investors to avoid risk-taking and therefore include less risky assets in their portfolios. Currencies such as gold and the Swiss franc show strong risk aversion.
Due to weak global cues, the market’s rise in 4 weeks was restrained, the rupee also weakened against the dollar
Cash-strapped
Not only America, but the financial situation in India is getting worse. Due to this, the Reserve Bank of India (RBI) is gradually moving towards normalization of liquidity. The call money rate touched a high of 4.55 per cent, up from 3.25-3.50 per cent in the previous month. Call money rate is the rate at which banks take overnight loans. Along with the jump in call rate, the tri-party repo dealing and settlement also touched a level of 4.24, which was around 3.5 per cent at the end of December.
Selling of FPIs
foreign portfolio investors : Foreign portfolio investors continue to sell-off as they exit expensive markets amid rising global bond yields and move to attractive value markets such as Japan and Europe. Overall, foreign investors have sold over Rs 1 lakh crore since October.
Margin and demand concerns
Earnings of Indian companies for the quarter ended December so far have indicated heavy pressure on their operating margins and are impacting their profitability. While initial commentary from companies like Hindustan Unilever indicated pressure on the rural economy, Bajaj Finance said earlier this month that even low-income consumers in urban areas have been affected by the pandemic.
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