Why Market Down Today: The stock market closed with a huge fall on Monday. Sensex and Nifty fell up to 1%. Strong profit booking in smallcap-midcap, continuous FII selling, weak rupee and increased uncertainty before the US Fed meeting reduced the market edge.
Sensex Nifty Fall Reasons: Heavy selling was seen in the stock market on Monday, December 8. Investors made strong profit booking especially in smallcap and midcap stocks, while many big stocks also showed pressure. Along with this, continued FII selling and uncertainty in the market increased before the US Fed decision. By 2:30 pm, Sensex was down 799.80 points at 84,912.57 and Nifty was trading at 25,897.90, down 288.55 points. InterGlobe Aviation, Bharat Electronics and ETERNAL were the biggest losers in the Nifty 50, while HDFC Life and Tech Mahindra saw marginal gains. Know the 5 biggest reasons behind such a huge decline in the market…
Vigilance increased before US Fed meeting
Caution was seen in global markets ahead of the US Federal Reserve’s policy meeting to be held on Wednesday. According to market experts, investors are on alert due to FOMC meeting, inflation data and year-end adjustments. Within a week, central banks of many countries will also hold meetings.
Heavy profit booking in smallcap-midcap
Today’s decline was most visible in small and midcap stocks. Nifty Smallcap 100 fell by almost 2%. Nifty Midcap 100 fell by nearly 2%. According to experts, where big investors lighten their positions by reducing the risk in the market. The decline was further intensified by heavy unwinding in some thematic sectors like defense electronics, renewables, industrials.
Pressure from continuous FII selling
Foreign investors remained on the selling side for the 7th consecutive day. FIIs sold shares worth Rs 438.90 crore in the last session. Global uncertainty, increased valuations and weakness in Asian markets accelerated the decline.
Weakness in rupee and crude oil shook market confidence
Rupee weakened by 16 paise to reach 90.11. Demand for the dollar increased due to expensive crude and continuous FII selling, which put pressure on the rupee. Brent crude rose 0.13% to $63.83 a barrel. Expensive crude is a double blow for India. Import bill also increases. This increases the risk of inflation, that is why the market remained in cautious mode.
India VIX up 2%
India VIX rose 2.11% to 10.53. High VIX means there is fear in the market and less appetite for risk. Due to this also a decline is being seen in the market. The effect of which was visible on Monday also.
Disclaimer: The information given in this article has been prepared for general information purposes only. This is not any kind of investment or financial advice or stock recommendation. Investing in the market comes with risks. Before making any investment, definitely consult your financial advisor.