Stock market in the red: Know the main reasons Sensex plunged 900 points today

Last update:November 21, 2024, 1:47 PM IST

Indian stocks have been under pressure due to a combination of factors; Know the key factors here

Why is the market down today?

Benchmarks Sensex and the Nifty fell 1% in intraday trade today, weighed down by a sharp sell-off in the Adani Group sharesescalating geopolitical tensions and continued outflows of foreign institutional investors (FIIs).

The BSE Sensex opened at 77,711.11 and fell over 900 points to hit an intraday low of 76,802.73. Around 12:35 p.m., it rebounded slightly, trading at 77,127.42. Meanwhile, the NSE Nifty fell 179.75 points to settle at 23,338.75 during early trade.

Indian stocks have been under pressure due to a combination of factors, with the indictment of billionaire Gautam Adani in a bribery case by the US Securities and Exchange Commission (SEC) a key trigger. In addition, rising tensions from the Russia-Ukraine conflict and a general sense of weakness in global markets further weighed on investor sentiment.

Also, market analysts are carefully following the results of the state assembly elections. Manish Chowdhury, head of research at StoxBox noted, “Given the current market jitters, influenced by recent global geopolitical developments and the fresh Adani bribery case, an unfavorable outcome for the ruling Maharashtra government could dampen sentiment further the market”.

The reasons behind the market decline

The Adani factor

On Wednesday, US authorities revealed that Adani and seven others, including his nephew Sagar Adani, allegedly paid around $265 million in bribes to Indian government officials to secure contracts expected to generate profits of $2 billion a year. over 20 years, including the development of India’s largest state. solar power plant.

The news sent shares of the Adani Group down as much as 20% in intraday trade, with shares of Adani Energy Solutions, Adani Enterprises, Adani Ports, ACC and Ambuja Cements touching lower limits of the circuit. Other Adani Group companies such as Adani Green Energy, Adani Total Gas, Adani Power, NDTV and Adani Wilmar also saw declines of between 10% and 20%.

Increasing geopolitical tension

The escalation of the Russia-Ukraine conflict also contributed to market jitters. Ukraine’s use of UK-supplied Storm Shadow missiles, along with Russia’s recent changes to its nuclear doctrine, fueled investor uncertainty.

Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services noted, “Elevated tensions from the Russia-Ukraine war are likely to influence market sentiment. Growing uncertainty may prompt market participants to take a wait-and-see approach.”

Foreign investor exits

Data on November 18 showed a slowdown in FII selling as domestic institutional investors (DIIs) continued their buying. However, FII inflows picked up again on November 19 to Rs 3,411.73 crore, further dampening market sentiment.

Weak trends in Asian markets also contributed to the decline in India, with Nvidia’s revenue numbers coming in below expectations after the US market closed. Among Asian markets, Tokyo, Shanghai and Hong Kong posted declines, while Seoul remained in positive territory.

Technical perspectives

According to technical analysts, the key support level for the Nifty is 23,588. If the index holds above this level, a rise towards 23,711, 23,904 or 24,027 can be seen. However, a drop below 23,588 could trigger profit-taking, potentially leading to a correction towards 23,395, 23,272 or 23,079 levels, analysts at Axis Securities noted.

Disclaimer:Disclaimer: The opinions and investment advice provided by the experts in this News18.com report are those of News18.com and not of the site or its management. Users are advised to consult certified experts before making any investment decisions.