Share Market Falls: The Indian stock market witnessed all -round decline on 22 August today. With this, the Sensex and Nifty broke the process of six days of continuous rise. At the end of the trading, the Sensex fell 693 points to close at 81,306.85. While the Nifty has lost 213 points to close at 24,870 levels. The total market value of companies listed on BSE decreased by Rs 2 lakh crore. Investors’ attention is currently on the US Jackson Hole Conference and the signs of it. Due to this, they remain alert.
Almost all the major sectoral were also trading in the index red mark. Only pharma and consumer durables sector saw a slight rise. Financials and banking index broke up to about 1%. IT shares also saw selling after three consecutive days of rise.
There were 6 major reasons behind today’s decline in the stock market-
1) Profit booking
The Sensex and Nifty continued to rise for six consecutive days. After which investors started booking profits today. The biggest decline was seen in financials and IT stocks. Heavyweight stocks like HDFC Bank and ICICI Bank saw selling. Due to this, Sensex and Nifty most indexed under pressure.
2) Nervousness before Jerome Powell’s speech
Jerome Pavel, chairman of the US Federal Reserve Bank, is going to give a speech at the Jackson Hole Conference late today. In this speech, it is expected to receive big signs about the direction of American Monetary Policy. Price Research Head of HDFC Securities, Devarsh Advocate said, “The major reason for the weakness in the stock market is the speech of Federal Reserve Chairman Jerome Powell today. The market has increased uncertainty before this speech, due to which profits are being seen. In this speech, there can be indications about the direction of the monetary policy of September.”
3) Bounce in India Vix
The India VIX index rose nearly 2% to 11.59 on Friday, indicating instability in the stock market. This is a sign of the declining ability to take risk in investors. Traders usually reduce positions after an increase in the volatility index.
4) Concern of American tariff
The additional 25 percent of the US tariffs, which came into force from India from August 27, also weakened the investors’ sentiments. Dr. VK Vijaykumar, Chief Investment Strategist of Geojit Investments Limited, said, “If a penalty tariff of 25% is applied, then its impact on India’s GDP growth can be more than 20–30 basis points than earlier estimates. It can also show the effect on the market.”
5) Indian rupee weak
The Indian rupee slipped 11 paise to 87.36 per dollar in early trade on Friday. The demand for dollars increased but the investment of FPI (foreign portfolio investment) and softening in crude oil prices saved great damage.
6) America comments on India
White House Trade Advisor Peter Navarro has made a scathing attack on India once. Navaro alleged that India is buying oil from Russia for profiteering. He described India as “Londromat” (Self-Servant Laundry) for Russia. Also said that the deadline for implementing secondary tariffs on Indian goods will not progress further. This statement weakened the market sentiment.
What do experts say?
Anand James, the chief market strategist of Geojit Investments Limited, said the recent speed of the Nifty has stopped near the resistance level of 25,153. He said, “Although there are no major signs of decline, but currently there will be important support levels for 25,033–24,977 Nifty, given the volatility.”
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