Nifty 50, Sensex crash today nearly 1% each; 5 reasons why market is falling today

The 30-share BSE Sensex ended lower by 790.34 points or 1.08% at 72,304.88 level while the Nifty 50 closed at 21,951.15 level, down 247.20 points or 1.11%.

On the broader market front, the Nifty Small Cap 100 dropped 1.87% and the Nifty Midcap 100 indexes was down by 1.94%.

Analysts believe that investors booking profits after significant gains could have triggered some short-term selling pressure. Additionally, as the F&O expiry day on Thursday, February 29th, draws near, traders’ rollover of holdings to the next expiry day has caused volatility. 

Further, analysts noted that 90 stocks were trading lower during Wednesday’s session as the Nifty Midcap index fell more than 1,000 points.

Let’s look at some of the key reasons behind today’s market fall.

Foreign Institutional Investors (FIIs) selling

FIIs selling off substantial amounts of Indian stocks possibly contributed to the market’s fall, according to experts.

FII has continued to be a net seller, with month-to-date (MTD) net sales of ₹17,650 crore. The head of business development for institutional equity at Emkay Global, Jaykrishna Gandhi, stated that domestic institutional investors (DIIs) had, on the other hand, net purchased ₹23,782 crore MTD.

Key Economic data ahead 

Ahead of important US economic data, including the second estimate of GDP, PCE, and manufacturing statistics, analysts say that global markets have been struggling for direction over the week. 

“The market also became nervous before so many economic indicators such as GDP data, PCE price index data, and manufacturing PMI numbers in the US. Another reason may be that the US government will partially shut down on March 1st without a spending bill,” said Pravesh Gour, Senior Technical Analyst at Swastika Investmart Ltd.

Delay in US Fed rate cut 

The US Fed has stated that, given the upside risk to inflation, there is not an urgency to cut rates quickly. There is concern among global investors that the Fed’s rate cut may be postponed as they await important US economic statistics, such as personal consumption expenditure, in the hopes of a positive projection.

(more to come)

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Published: 28 Feb 2024, 03:05 PM IST