Black Tuesday!! What's haunting Indian stock markets? Sensex cracked over 750 points
Tuesday, 3rd Sept proved to be a Black Tuesday for stock
market investors. Domestic equity markets tanked after the release of GDP data,
which indicated that India's growth slowed to 5 %
BSE Sensex and NSE Nifty plunged heavily today. Sensex plunged over 750
points at 36,562 while Nifty was plunged to 10,798
Here are reasons that are haunting the Indian equity markets:
Lowest GDP growth in last six
years
This is no doubt the, biggest factor behind the weak market sentiment
as India's economic growth has plummeted to 5 per cent, the weakest in six years.
Adding to worry, growth has slumped for the fifth consecutive quarter despite
the government's best efforts to prevent fall. Brokerage firms have started to
downgrade their targets which have further rattled foreign investors.
Core industries slowdown, PMI
data
According to official data, the growth of eight core industries
dropped to 2.1 per cent in July due to a contraction in coal, crude oil,
natural gas, and refinery products. Last year this figure stood at 7.3 per
cent.
Rupee hits 72 a dollar mark
Rupees’s freefall has also affected the stock market sentiment. Rupee
fell sharply on Tuesday to go beyond the 72/dollar-mark again. Strengthening of
the US dollar and weak GDP data has dented the rupee's value.
FII outflow
Equity markets are also bearing the brunt of higher capital outflow /
selling. Since August, FII continued their selling spree, withdrawing close to
Rs 5,500 crore from the Indian equity market. In July also, the foreign
investors had pulled out close to Rs 3,000 crore.
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