The BSE Sensex closed 586.65 points down to one-year low of 25,696.44, while Nifty tanked 185.45 points to close at 7,785,85 following weak macroeconomic-data amid subdued Asian cues due to weakness in China’s economy.
The Sensex fell over 700 points intraday.
“The volatility in the markets is largely because of factors outside the control of market participants in India,” Deven Choksey, managing director, KR Choksey Securities said.
Below are the 5 reasons why Sensex fell belw 500 points today
1. Market sentiments were affected after India’s GDP growth slowed to 7 per cent in the April-June quarter from 7.5 per cent in the previous quarter.
2. Subdued Asian cues amid weakness in China’s economy, loomed over the trading sentiments. In overseas markets, Asian stocks traded lower after two surveys showed China’s manufacturing sector in the grip of its worst slump in several years, raising fresh fears about the health of its economy.
3. Foreign investors pulled out a record $2.55 billion from Indian markets in August, the highest ever monthly outflow at least since 2002 as per regulatory data that took a toll on market sentiments.
4. Banking and financial stocks fell after reports of HDFC Bank’s steep base rate cut on Monday sparked fears that other lenders will be able to match it only at the cost of margins. This contributed to markets decline as BSE Bankex plunged over 3 per cent intraday on Tuesday.
5. Disappointing sales numbers of Maruti and Mahindra & Mahindra brought the stocks of companies down, contributing to market fall.
Sanjeev Zarbade, vice-president, private client group research, Kotak Securities, said, “Today’s markets began on weak global cues as the US markets had closed lower on Monday amid continued uncertainty about China and the Fed. European markets also fell on Monday over continuing concerns on China and on uncertainty over what the US Fed will do in the next FOMC meeting. Apart from global cues, Indian equities were buffeted by lower-than-expected GDP data and Disappointing sales numbers of Maruti and Mahindra & Mahindra.”
With agency inputs