The BSE Sensex and NSE Nifty slipped over a percentage point on Monday on account of selling in frontline bluechip counters. The 30-share index closed 373.94 points, or 1.30 per cent down at 28294.28, while the 50-share index settled 108.50 points, or 1.23 per cent, down at 8723.05. The BSE Midcap and Smallcap index also dipped by 0.53 per cent and 0.55 per cent, respectively.
Below are 5 reasons why Sensex plunged over 350 points on the first day of trade:
1) Subdued global markets dented market mood on the domestic equity front. China stocks dropped nearly 2 per cent to a seven-week low on Monday, dampened by falls in the property sector and as Asian markets retreated after losses on Wall Street. Hang Seng, Nikkei and Shanghai closed lower by 1.56 per cent, 1.25 per cent and 1.76 per cent. Weak opening in European market further add some selling pressure in the late hour of trade.
2) Rupee: Weakness in Indian rupee further weighed on the sentiment. The local currency was trading 3 paise down at 66.69 against dollar around 3.23 pm.
3) Investors also remained cautious ahead of the first US presidential debate later in the day, as well as an upcoming informal meeting of OPEC producers.
4) Selling pressure in real estate, power, banking, auto and FMCG stocks further added some pressure on domestic equity markets. The BSE Realty index, Bankex and Auto index were down by over 1.5 per cent in the last hour of trade.
5) On Wall Street, Dow Jones Industrial Average index closed 131.01 points down at 18,261.45 on Friday, the S&P 500 slipped 12.49 points to 2,164.69 and the Nasdaq Composite declined by 33.78 points to 5,305.75. Weak closing of US markets also dented market sentiments in early trade.