Why Are Markets Falling? 5 Reasons Why Sensex and Nifty Are Under Selling Pressure
On Monday, the Indian stock market saw a sharp drop, with the Sensex plunging over 1,000 points from its peak, and the Nifty 50 also facing significant losses. This selloff came after a period of market volatility. Here’s why:
1. Foreign Investors Selling:
Foreign portfolio investors (FPIs) sold a massive ₹30,719 crore worth of Indian shares in just four days of October. Investors are shifting their money to China due to its recent economic support and attractive stock prices. Chinese markets are performing much better right now, pulling funds away from India.
2. New SEBI Rules:
The Securities and Exchange Board of India (SEBI) introduced stricter rules for trading in stock derivatives. These changes make it harder and more expensive to trade, discouraging some investors and adding pressure on the market.
3. India’s Downgrade by BCA Research:
BCA Research downgraded India’s stock market rating from “neutral” to “underperform,” predicting that Indian stocks will do worse than other emerging markets in the coming months. They advise buying Chinese stocks and selling Indian stocks due to concerns over slowing profits and high valuations in India.
4. Rising Oil Prices:
Crude oil prices have gone up sharply, which is bad news for India as it heavily depends on oil imports. Higher oil prices increase the country's import bill and hurt industries like energy and transportation.
5. Technical Levels on Nifty and Bank Nifty:
From a technical standpoint, key levels on the Nifty and Bank Nifty indices indicate more selling pressure. Nifty faces support at 24,750 and resistance at 25,300, while Bank Nifty’s key support is at 51,000, with opportunities for gains if it stays above this level.
The combined effect of these factors is causing markets to drop and making investors cautious. Keep an eye on oil prices and market sentiment in the coming days to gauge future movements.
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