Market Mayhem: Sensex nosedives 617 points on F&O expiry day. Here are 5 factors behind today's crash
Bears were on a rampage on Thursday as selling pressure was witnessed in most sectors. Sensex hit the day's low of 73,668.73 and Nifty briefly slipped below 22,500. Indices plummeted for the fourth straight day, sending Dalal Street into a tailspin. Here are top five factors behind the blood bath. Investors lost 4.49 lakh crore.
Indian headline indices tanked on Thursday ahead of the final phase of polling amid witnessed in most sectors. While the S&P BSE hit the day's low of 73,668.73 sliding by nearly 800 points or 1%, the broader touched intraday low of 22,459.15, correcting by 250 points or 1%.Sensex ended the day at 73,885.60, lower by 617.30 while the 50-stock settled at 22,488.65, down by 216.05 points. Thursday's session marks the fifth consecutive day of declines for the .
The market capitalisation of all BSE listed companies fell by 4.49 lakh crore to 410,71,639.09.
Here are the top 5 reasons which led to the downfall:
1) Heavyweights Drag
The market fall was triggered by correction in heavyweights, including (RIL), and (TCS). They were the biggest laggards in terms of their contribution to the .
2) Election Jitters
With just one phase of polling to go on Saturday, June 1, the nervousness was palpable on the Street with analysts decoding the worst and best case scenarios for the market. The election results will be announced on June 4 and the exit polls will start on Saturday after 6 pm when the final phase of polling ends. Street is not ruling out 10-15% correction if the outcome is not in favour of the incumbent NDA government.5) F&O Expiry
Thursday is also the F&O monthly Nifty expiry and the traders could be squaring off their positions.3) Fed Commentary
Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, said the fact that policymakers were not ruling out the possibility of further rate hikes seems to have made the Street nervous. Kashkari said this on Tuesday while underscoring that the US central bank's policy stance still remains restrictive. His comments led to an uptick in the US bond yields.“Hotter and stickier-than-expected global inflation appears to be taking the air out of asset markets,” an AP report said, quoting Mizuho Bank. “In other words, “Goldilocks” coming undone. And worries about adverse demand impact from higher rates seeping through,” it said.
This led to sharp correction on Wall Street with all three headline indices closing the Wednesday session in the red. While Dow 30 closed at 38,441.50, down by 411.32 points or 1.06%, S&P 500 settled at 5,266.95, down by 39.09 points or 0.74%. Nasdaq Composite fell by over 99.30 points or 0.58% to close at 16,920.60.
4) Asian Markets
The Indian markets took their cues from their Asian peers as well with many top indices slipping sharply. Japan's Nikkei 225 fell by 1.30%, Hong Kong's Hang Seng corrected 1.34% while China's Shanghai Composite slid 0.62%.Source: Stocks-Markets-Economic Times
