Sensex tanks north of 600 places, Clever slips under 19,000-mark
Following losses in the previous session, both of India's stock indices, the Sensex and Nifty, continued to trend lower on Wednesday. The benchmark BSE Sensex, which is currently trading at 66,985.36, started the day's trading with a significant decline of more than 600 points. The Nifty index, which is currently trading at 19,968, fell below the crucial 20,000-point mark in the meantime.
NEW DELHI: Both Indian indices, the Sensex and the Nifty, extended losses from the previous session on Wednesday.
The benchmark BSE Sensex, which opened more than 600 points lower, is currently trading at 66,985.36. The Nifty index is currently trading at 19,968, falling below the 20,000-mark.
The most notable decline among the Sensex companies was experienced by HDFC Bank, which saw a drop of more than 3 percent. Reliance Industries, Bharti Airtel, Maruti, Titan, and Hindustan Unilever were some of the other notable underperformers. Positively, Mahindra & Mahindra, Indusind Bank, Axis Bank, and NTPC were among the winners.
These are the main causes of the market decline:
This decline was a reaction to the US markets' poor overnight performance, as well as theI ncreasing prices for crude oil globally, which were influenced by the dollar in US.
Foreign fund withdrawals and a downward trend in the major index heavyweight, HDFC Bank, added to the overall negative sentiment.
US Fed action
The US Federal Reserve's decision to raise interest rates has investors on edge as well. Investors should exercise caution and pay close attention to the outcome of the US Federal Reserve's decision, which will be made public this evening.
Despite recent increases in consumer prices brought on by energy costs, analysts predict that the US Federal Reserve will decide to halt its interest rate hikes on Wednesday. The Fed is trying to control inflation while avoiding a recession.
Although inflation has significantly decreased since the Federal Reserve set its long-term target rate at two percent annually in March of the previous year, there have been 11 interest rate increases since then. Officials are forced to consider additional policy measures as a result of the ongoing inflationary pressure.
Higher cost of oil
Experts claim that the market will soon face a number of difficulties, including rising oil prices. Concerns over weak US shale production on Tuesday drove oil prices up to their highest levels in ten months, which added to worries resulting from Saudi Arabia's and Russia's protracted production cuts.
The price of fuel has a significant impact on the Indian economy because we import nearly all of the oil we need for our energy needs.
"The market is starting to realise that wherever you look there are concerns about tight supply, whether it's crude oil, diesel or petrol," Price Futures Group analyst Phil Flynn said to Reuters. We are being confronted with reality.
Fears of inflation
Increased concerns about inflation are anticipated to result from rising oil prices, which will force the Reserve Bank of India (RBI) to keep its interest rate pause in place for an extended period of time. The prospect of lower Equated Monthly Installments (EMIS) may be dashed by this development.
According to DK Joshi, chief economist at Crisil, "if the sustained increase in crude prices continues, it can manifest in the headline consumer inflation figure through both direct factors, like higher fuel prices, and indirect effects. like increased production and transportation costs." "Fuel and core inflation have remained subdued at levels below 5%," Joshi added, "and the inflationary spikes observed in July and August were primarily driven by food prices."
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