Indian Daily Press
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Sensex Drops 1,100 Points, Nifty Smallcap Crashing 5%; Principal Causes of Rs. 13 Lakh Crore Disposition

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<p><strong>Market Crash:</strong> On Wednesday, March 13, bears rampaged along Dalal Street, resulting in a more than 1% intraday decline in the benchmark S&P BSE Sensex and Nifty50 indexes.</p>
<p><img decoding=”async” class=”alignnone wp-image-504811″ src=”https://www.theindiaprint.com/wp-content/uploads/2024/03/theindiaprint.com-sensex-drops-1100-points-nifty-smallcap-crashing-5-principal-causes-of-rs-13-lakh-.jpg” alt=”theindiaprint.com sensex drops 1100 points nifty smallcap crashing 5 principal causes of rs 13 lakh” width=”1043″ height=”782″ title=”Sensex Drops 1,100 Points, Nifty Smallcap Crashing 5%; Principal Causes of Rs. 13 Lakh Crore Disposition 6″></p>
<p>The remarkable comeback in the wider market is expected to stall as the smallcap index plunged 5%, marking the largest single-day decline since December 2022; midcaps lost 3%; microcaps and SME stock indexes sank almost 5% apiece.</p>
<p>All equities listed on the BSE had a decline in market capitalization of Rs 13 lakh crore, reaching Rs 372 lakh crore.</p>
<p>“Investors need to concentrate on the market’s ongoing downturn, especially in the small-cap space. For some months now, there has been worry about the inflated values in these categories, which are being caused by the irrational optimism of individual investors. However, it took the regulator Sebi’s forceful warning to bring about a correction. Mutual fund activities and persistent selling points to further suffering, according to VK Vijayakumar, chief investment strategist at Geojit Financial Services.</p>
<p><strong>The following are the main causes of the decline in the Sensex, Nifty, and small-cap stocks:</strong></p>
<p><strong>Sebi Stress Test:</strong> Given that Sebi Chairperson Madhabi Puri Buch issued a froth warning on small caps and midcaps, the Sebi stress test may have played a significant role in the fall. “There are pockets of froth in the market,” said Madhabi Puri Buch after the market regulator’s request last month for mutual funds to set up a structure to safeguard the interests of small- and mid-cap investors. Some may refer to it as froth, while others may term it a bubble. It may not be suitable to let that foam continue to rise.</p>
<p>The head of Sebi also issued a warning, stating that “irrational exuberance” is being caused by valuation metrics that are out of control and unsupported by fundamentals.</p>
<p>Large-cap stocks were seeing profit booking as 26 out of 30 Sensex stocks and 46 out of 50 Nifty stocks were falling on Wednesday. Adani Ports fell 5.5%, PowerGrid and Adani Enterprises shed 6% each, Coal India shed 5.4%, and NTPC shed 5%.</p>
<p><strong>Other than that, the following companies had declines:</strong> HUL, Hero MotoCorp, Axis Bank, IndusInd Bank, JSW Steel, Reliance Industries, Maruti Suzuki India, Bajaj Auto, ONGC, Titan, Hindalco, Bharti Airtel, L&T, Tata Consumer, Tata Motors, and HUL.</p>
<p><strong>Technical outlook:</strong> Any upward momentum is challenged by the Nifty index’s strong resistance, which lies between 22,410 and 22,450.</p>
<p>If the Nifty closes below 22,300, further decline is expected, but there should be some support at 22,200. The likelihood of a decline towards 21,860 grows if the Nifty is unable to stay above 22,200, according to Anand James, chief market analyst at Geojit Financial Services.</p>


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