Stock Market Crash: Domestic benchmark equity indices Sensex and Nifty50 took a U-turn on November 7 a day after gaining ground in the previous session on Republican Donald Trump’s win in the US presidential race.
The S&P BSE Sensex dropped 958 points, or 1.19% to hit an intraday low of 79,419.34, while the Nifty50 fell 302 points, or 1.23% to register the day’s low at 24,181.95 so far around 11:00 AM. As a result, the total market capitalisation of all listed companies on the BSE fell by Rs 4.36 lakh crore, dropping to Rs 447.31 lakh crore.
HDFC Bank, RIL, and ICICI Bank were some of the major contributors to the declines in the benchmark indices.
Earlier on Wednesday, Sensex zoomed 901.50 points 1.13 per cent to close at 80,378.1. The NSE Nifty scored double ton to end at 24,484.05, up 270.75 points or 1.12 per cent.
Sensex, Nifty Today: Why is stock market falling today?
1. The domestic stock market is facing pressure today, largely due to the impact of the “Trump trade” revival. As the dollar strengthened and U.S. yields rose sharply after Trump’s election, emerging markets, including India, were hit hard by these global cues. The market sentiment was dampened as investors reacted to the potential economic shifts and policy changes that Trump’s victory could trigger.
2. US Treasuries saw a sharp decline on Wednesday, pushing yields to multi-month highs. This movement came after Trump’s election victory, which fueled expectations of economic policy changes likely to increase deficits and inflation. The benchmark 10-year Treasury yield climbed to 4.479%, its highest level since July.
3. Investors are now turning their attention to the Federal Reserve’s upcoming rate decision to gauge the interest rate trajectory. The US Federal Reserve began its two-day monetary policy meeting on Wednesday. While the Fed is expected to announce another 25-basis point rate cut, the outlook for future rate decisions remains uncertain. This has added to the overall market volatility.
“The ‘Trump trade’ which has sharply lifted the US markets is unlikely to have a similar positive impact in India since Indian market valuations are high and there are headwinds of an earnings slowdown. Investors should stick to quality and value during this period of euphoria and uncertainty,” said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
“It is important to understand that even though Trump’s anti-China policy has positive implications for India, Trump has been critical of ‘India’s high tariffs’ and won’t hesitate to impose tariffs on India’s exports to the US,” Vijayakumar added.
Nifty Prediction: Key Levels To Watch
Mandar Bhojane, Research Analyst at Choice Broking, said, “If Nifty sustains above the 24,500 mark, we could see further upside momentum, with targets around 25,000 and a key resistance at 25,400. On the downside, immediate support lies at 24,000 and 23,800, offering a buying-on-dip opportunity for long positions.”
