sensex today: ET Market Watch: Rs 2 Lakh Cr wiped from market, Sensex down 733 points: 7 factors behind the crash
Investors suffered losses of over Rs 2 lakh crore after the Sensex fell 733 points at close. Seven key factors in today’s genocide. Sensex closed 733 points lower at 73,878 after falling over 1000 points during the day, while Nifty closed at 22,475.
1) Index heavy stocks
The market erased its morning gains due to losses in RIL, L&T, HDFC Bank and Airtel. These stocks dragged down the headline index the most in terms of their contribution to each index.
2) India VIX
India’s VIX, a measure of volatility, surged more than 12% intraday to 15.12 due to further changes in market sentiment, fourth quarter earnings, elections and timing of interest rate cuts by the US Federal Reserve. At the close, it rose 8.72% to 14.62.
3) Inflation concerns
The U.S. Federal Reserve acknowledged in its May policy that achieving its inflation target is limited and emphasized that the inflation path remains uncertain. The market expects U.S. interest rates to remain high for longer and is pricing in just one rate cut in 2024, according to Rajani Sinha, chief economist at CareEdge Ratings. US NFP data due later today was also a factor in today’s volatility.
4) The higher the long-term interest rate, the higher the long-term interest rate.
The trajectory of US inflation has delayed the Federal Reserve’s first interest rate cut of the season. Now investors are starting to doubt whether the Fed will be able to cut interest rates in 2024.
5) Pre-election anxiety
With the election underway, market speculation is also causing significant volatility. Analysts believe volatility could increase further as we get closer to the June 4 election results date.
6) US jobs data
U.S. jobs data is scheduled to be released on Friday. The report gives an idea of the strength of the country’s job market, which the Federal Reserve considers when setting interest rates.
7) Concerns over supply and demand of crude oil
Markets are also awaiting indicators on future crude oil supplies from the world’s largest producer. Reuters previously reported that the OPEC+ group could voluntarily cut oil production by 2.2 million barrels per day after June if oil demand does not increase.
July Brent crude futures rose 31 cents to close at $83.98 a barrel, while U.S. WTI June crude futures rose 26 cents to $79.21 a barrel.
