Market benchmark BSE Sensex tanked over 400 points intraday on Thursday and NSE Nifty breached 8,100-mark following profit-booking by investors after Wednesday’s gains amid weak global cues. At 12.01 pm, Sensex was trading 401.03 points down at 26,325.31, while NSE Nifty was trading 129.30 points down at 8,094.30.
Below are five reasons why BSE Sensex plunged over 350 points in today’s trade:
1. According to market experts, some profit booking were seen in today’s trade after the benchmark BSE Sensex gained over 300 points on Wednesday.
2. Pressurised by weak global cues, Indian markets made a soft start on Thursday. Sentiment remained dampened after the US Federal Reserve kept interest rates unchanged, citing slow jobs gains, tepid growth and low inflation – and an impending vote in Britain on whether to quit the European Union. However, the central bank signaled that there may be two rate increases this year, saying it expects the US job market to strengthen after a recent slowdown.
Asian stocks were also trading mostly in red at this point of time with Japanese stocks falling behind their peers after the Bank of Japan (BoJ) kept monetary policy steady as was widely expected.
3. Traders also remained concerned with report that India’s merchandise exports contracted again, albeit at their slowest pace in 18 months in May as non-petroleum exports finally turned positive, led by exports of engineering goods and gems and jewellery. Exports contracted at 0.79% in May while imports slipped 13.16%, leaving a trade deficit of $6.27 billion.
4. Foreign portfolio investors (FPIs) sold shares worth a net Rs 108.23 crore on 15 June 2016, as per provisional data released by the stock exchanges.
5. Meanwhile, Indian rupee pared its initial gains to depreciate by 6 paise to 67.21 against dollar in late morning deals following fresh bouts of dollar demand from importers and banks amid lower domestic equities.