Stock market crash: Indian markets ended lower on Thursday, November 28, after experiencing some pullback in the previous session. Pressure from the IT sector, along with heavyweight stocks like Reliance Industries and HDFC Bank, dragged the front-line indices lower.
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Although the Adani Group stocks provided some support, it wasn’t enough to push the indices into positive territory.
Amid weak global cues and a sell-off in IT stocks, the Nifty 50 ended the session with a sharp decline of 1.49%, closing below the psychological 24,000 mark at 23,914 points. Similarly, the Sensex posted a significant drop of 1.48%, settling below the 80,000 mark at 79,043 points.
On the other hand, the broader market managed to weather today’s sell-off, with both the Nifty Midcap 100 and Nifty Smallcap 100 ending the session flat.
According to stock market experts, the Indian stock market fell today after trading range-bound for nearly three sessions. They said that due to the lack of big international triggers in the wake of the closed US stock market and the approaching Indian Union Budget 2025, DIIs are in a watch situation. FII selling, a strong US dollar, and discounted geopolitical triggers are some of the significant reasons that are pulling down the Indian stock market today.
However, they maintained that the current stock market crash can be termed mere profit-booking if the Nifty 50 index manages to close above the crucial 24,050 mark.
Below are some of the key reasons attributed by analysts for today’s sharp fall:
1] Stock market holiday in the US: “The Indian stock market surged yesterday due to the rising US stock market. However, there is a lack of global cues due to the stock market holiday in the American market today. This could be the possible reason for profit-booking trigger in the Indian stock market despite a gap-up opening in the Opening Bell,” said Mahesh M Ojha, AVP — Research at Hensex Securities.
2] FII selling: The Hensex Securities expert said that overall FIIs were net sellers in November, and DIIs are also not buying the way they were earlier. This could also be a reason for the Indian stock market not sustaining higher levels.
3] Union Budget 2024: Regarding DIIs not buying in the current Indian stock market, Mahesh M Ojha said, “DIIs are waiting for the final cue from the Indian government after their victory in the Maharashtra Assembly Election. As the Union Budget 2024 is just two months away, they are in a Catch-22 situation, and hence they are non-participant in the current Indian stock market.”
4] Strong US dollar: Pointing towards the rising US dollar rates, Anshul Jain, Head of Research at Lakshimishree Investment and Securities, said, “Investors are switching money from the gold and equities to bond and forex market as the US dollar prices are continuously rising. This is also a reason for FIIs’ continuous selling in the Indian stock market.”
5] Discounted geopolitical tension: “We witnessed a bounce back in the Indian stock market in the last two sessions after the news broke of a ceasefire in the Israel-Hezbollah war. However, the geopolitical trigger has been discounted, and the focus has once again shifted towards the Russia-Ukraine war. Hence, there is selling pressure in the Indian stock market,” said Avinash Gorakshkar, Head of Research at Profitmart Securities.
Stock market outlook
Speaking on the outlook for the Indian stock market after this fall, Mahesh M Ojha of Hensex Securities said, “The Nifty 50 index has crashed below the 24,050 mark, which is crucial for the frontline index. If the 50-stock index closes above this crucial support, we can witness a rebound in the Indian stock market soon. Otherwise, the Nifty 50 index may test 23,800 levels soon.” In this weak market, he advised day traders to look at railways, oil, energy, and other infrastructure stocks.
