The benchmark BSE Sensex fell over 400 points in early trade on Friday. At 1.40 pm, BSE Sensex and NSE Nifty were trading 348.95 points and 99.80 points down at 27,258.87 and 8,272.95, respectively.
All-round selling pressure mainly in auto, realty, banking and capital goods stocks dented market sentiments. The BSE Realty index was down over 3.18 per cent at 1,292.11, it was followed by the BSE Bankex (down 1.64 per cent), BSE Auto (down 2.39 per cent) and BSE Consumer Durables index (down 1.04 per cent).
Here are the reasons explaining why the market moved southward in today’s trading session.
1. Weak Global cues: Weakness in global markets and downward movement of SGX Nifty sent negative signals to domestic equity markets. As a result, the 30-share BSE Sensex was trading over 400 points down in the early trade. The index opened at 27,440.10 and had touched a high and low of 27,442.82 and 27,131.44, in trade so far (till 1.07 pm). European shares fell sharply on Friday, tracking a drop in Asian equity markets and US stock futures after a survey showed Chinese factories contracted at their fastest pace since the global financial crisis in 2009. In the New York market, US stocks suffered their worst sell-off in 2015 overnight as markets were buffeted by worries about a slowdown in global growth.
2. Rupee Slide: The sharp devaluation in Chinese yuan, which lead to chain of deprecation in emerging market currencies, has clearly shown weakness in Chinese economy. The Indian rupee, which had shown exceptional strength this year, fell nearly 3 per cent since Chinese Devaluation.
On Friday, the rupee too touched a low of 65.90 per dollar, the lowest since September 2013, tracking selloff in other Asian currencies.
3. Eikon Data shows, India is currently the third most expensive market on P/E in Asia Pacific.
(With inputs from Reuters)