Sensex crashes 600 points: 5 key factors behind bear attack on D-Street

Indian equity indices plummeted with Sensex tanking over 600 points, Nifty below 21,900. BSE market cap dropped Rs 3.71 lakh crore. IT stocks weakened, FIIs sold, and oil prices edged down. Nifty's support level at 21,915 breached.

Indian equity indices traded sharply lower on Tuesday, dragged by index heavyweights , Reliance Industries, and , while Asian peers declined ahead of the US Fed policy decision this week.

tanked over 600 points to below 72,200 level while gave up 21,900 mark. The market capitalisation of all listed companies on BSE declined by Rs 3.71 lakh crore to Rs 375.08 lakh crore.

Here are top factors that led to a selloff on Dalal Street today:

Global stocks on back foot

A gauge tracking Asia’s benchmarks remained on the back foot, dragged down by losses of more than 1% each in Hong Kong’s technology shares and South Korean equities. Meanwhile, contracts for US shares pointed to losses.

Japan's Nikkei share average swung between small gains and losses after the Bank of Japan on Tuesday announced an end to its long-running ultra-accommodative stimulus programmes, as widely expected.

IT stocks drag

IT major TCS emerged as the top Sensex laggard, experiencing a 3% decline. This dip coincided with 2.02 crore or 0.6% shares changing hands in a block deal on the counter. Other IT counters - HCL Tech, Wipro and Infosys - also traded with cuts, weighing on the index.

Overall, the IT index was down 2%, the worst sectoral loser today.

FIIs remain in 'sell' mode

Foreign portfolio investors sold Indian shares worth Rs 2,051 crore on a net basis on Monday.

Oil on boil

Oil prices edged down early on Tuesday after gaining in the previous trading session, due in part to the prospect of rising supply from Russia as well as the possibility of slower-than-expected downstream demand in sectors such as jet fuel. Despite the dip, Brent crude remains above $86 per barrel.

Technical indicators

Nifty, on the weekly chart, formed a long negative candle, which indicates the formation of a bearish engulfing-type pattern.

"Nifty, on the weekly chart, placed at the edge of moving below the strong support of the 20-week EMA, around 21,915. This is not a good sign. The near-term trend of Nifty is weak. A decisive move below 21,900 could open sharp weakness down for the next support of 21,500-21,400 levels," said Nagaraj Shetti, Senior Technical Analyst, HDFC Securities.

(With inputs from agencies)

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

Source: Stocks-Markets-Economic Times