Rs 5 lakh crore missing! 4 factors behind the Sensex accident today

NEW DELHI: A 1,100-point sell-off in Sensex and a sell-off in second-tier shares eroded investors’ wealth by more than Rs 5 lakh crore in Thursday trading, with their losses rising to Rs 34 lakh crore since the maximum of April 11 .

The data showed that the BSE m-cap fell by Rs 5.26 lakh crore to Rs 241.05 lakh crore from Rs 246.31 lakh crore in the previous session. The BSE m-cap on April 11 stood at Rs 275.17 lakh crore.

Posting its worst day in more than a week, the 30-share Sensex package sold lower for the fifth straight session, down 1,158 points or 2.14 percent at 52,930. Its broadest pair, the NSE Nifty, fell 359 points or 2.22 percent to close below the 15,850 mark. Fifty-pack Nifty has lost 5 percent in the last five sessions and closed at its lowest levels since July 2021.



Inflation data released in the US overnight pushed down domestic indices on Thursday.

US CPI data declined to 8.3% in April from 8.5% in March, but still beat analysts’ estimates of 8.1%, suggesting that while inflation in the world’s largest economy may have peaked, any further easing would be a slow process. process and that an aggressive stance from the Fed may continue.

market drivers
Forty-five of the 50 stocks in the index ended with cuts, with Adani Ports, IndusInd Bank, Tata Motors, Tata Steel and Hindalco all falling in the range of around 4-6 per cent each. Wipro, Eicher Motors, HCL Tech and TCS all managed to finish on a positive bias.

All sector indices ended in the red, with banks, metals, capital goods, autos, oil and gas, energy, FMCG, pharmaceuticals and real estate all falling between 1 percent and 4 percent.

The breadth of the market strongly favored the losers as NSE’s advance-decline ratio was 2:9. Some 760 stocks advanced, 2,601 declined and 86 stocks were flat; 112 stocks reached their upper circuit limits, while 533 touched the lower circuits.

Key factors

  • US inflation falls less than estimated

Data released overnight showed the US CPI slipped to 8.3% in April from 8.5% in March, but missed estimates of 8.1%, suggesting that if While inflation in the world’s largest economy may have peaked, any further easing would be a gradual process and an aggressive stance from the Fed could continue.

Wednesday’s headlines in the US were supposed to be that inflation peaked in March, not stalled, Edward Moya, senior market analyst at OANDA said in an overnight note.

“The month-on-month core reading up 0.3% to 0.6% should make some Fed members uncomfortable about raising rates by just half a point at the next meeting. Wall Street thought it was going to be done.” with rising inflation. its ugly head, but that doesn’t seem to be the case,” Moya said.

  • Dollar rises, Asian markets fall

The dollar hovered near a two-decade high after the US inflation reading, hurting emerging market stocks. The dollar index, which measures the greenback against a basket of six major world currencies, stood at 103.92.

Most Asian stocks were trading in the red. The MSCI index of Asia-Pacific shares outside of Japan fell 0.92 percent. Japan’s Nikkei fell 1.01 percent, Hong Kong’s Hang Seng fell 1.05 percent, while South Korea’s Kospi fell 0.36 percent.

Provisional data suggested foreign portfolio investors (FPIs) were net sellers of domestic shares to the tune of Rs 3,609.35 crore on Wednesday. FPI outflows have touched Rs 17,403 crore in May and Rs 1,44,565 crore in 2022 so far.

“With the dollar index at 104 and expected to strengthen further, FIIs are likely to continue selling until Indian valuation becomes attractive. Although buying DIIs is more than selling FIIs now, that is not enough to lift market confidence as macroeconomic headwinds are strong,” said VK Vijayakumar, chief investment strategist at

Services.

  • All eyes on India’s CPI reading

The day would see the release of India’s Apil CPI readings, which, unlike the US, may rise from the previous reading. Nirmal Bang Institutional Equities said CPI inflation is likely to rise to 7.4% in April from 6.95% in March, driven by higher edible oil and fuel prices and a gradual pass-through of rising prices. input costs at retail prices, as well as inflation in the services sector, supported by the opening of the economy.

Barclays, on the other hand, forecasts CPI inflation of 7.5%, as rising motor fuel, other energy and food prices keep upward pressures high.

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