oppn parties Stock Markets: A Huge Correction

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  • GST panel considers lowering the slab rate to 5% on many items of mass use, including medicine
  • Stock markets likely to open lower today due to escalation of hostilities in the Middle-East
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  • SC invokes its special powers, asks IIT to admit Dalit student Atul Kumar who was denied admission for not depositing the fee in time
  • SC questions the hurry of Andhgra CM Chandrababu Naidu going public over Tirupati prasadam contamination issue when there was no proof, asks |Gods to be kept free of politics
  • Infrastructure output falls in Auhust, the first time this has happened in three years
  • Out of court settlement between BharatPe and its co-founder Ashneer Grover brings to an end a 2-year legal battle. Company withdraws all charges against Deepak Gupta, the brother-in-law of Grover
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Stock Markets: A Huge Correction

By Linus Garg
First publised on 2023-09-21 03:32:47

About the Author

Sunil Garodia Linus tackles things head-on. He takes sides in his analysis and it fits excellently with our editorial policy. No 'maybe's' and 'allegedly' for him, only things in black and white.

The Indian stock markets crashed on Wednesday. BSE Sensex lost 796 points to end at 66800 and the Nifty 50 shed 232 points to close at 19901. The downslide was reflected in all sub-indices like the small- caps and mid-caps and also in sector-based indices. The biggest loser was HDFC Bank which plunged 3.87%, much more than the fall in the benchmark indices. Although there was no immediate trigger for the fall, rising crude prices have stoked fears of another round of inflation and consequently the view among experts is that RBI will delay cutting key policy rates. This might impact growth in the short term.

The crash on Wednesday reversed an 11-day rally in the markets which was the longest in 16 years and which added 3000 points to the Sensex. During this time, Nifty crossed 20000 for the first time. But finally, traders were spooked by rising oil prices, the weakness of the rupee, the US Fed's hawkish stance going ahead and the selling by foreign funds. Domestic funds also turned net sellers with an outflow of Rs 573cr.  HDFC Bank alone shaved off 482 points from the Sensex. The slide resulted in investors losing as much as Rs 2.9 lakh crore in a single session.

Although this can be seen as a correction which many veteran traders were predicting will happen after a prolonged rally, the domestic and international factors that weighed in on Wednesday will remain for some time. Oil prices are expected to rise further and with the dollar remaining strong, the rupee is likely to slide more. Investors need to exercise caution but there is no need to indulge in panic selling as market fundamentals are strong.