Benchmark indices BSE Sensex and NSE Nifty hit their fresh 52-week low in Wednesday’s trade and was trading over 20 per cent down from their record highs. Sensex closed 262 points down at 23,758.90, while Nifty settled 76.80 points down at 7221.40.
In the past one year, the 30-share index fell 15 per cent to 24,020.98 on Feb 9. The index was at 28,227.39 on the same day last year. NSE Nifty slipped below the 7,200 mark and was trading 103.65 points down at 7,194.55 at 1.48 pm.
On Wednesday, Sensex was trading 0.72 per cent down at 23,849 in the noon trade. The index opened the day 23,938.32 and has touched a high and low 23,938.32 and 23,743.79, respectively, in trade.
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Below are the 5 factors that gave direction to domestic equity markets in the past 12 months.
1) FIIs: Foreign institutional investors, or FIIs, offloaded shares worth Rs 10,844 crore in the past one year. According to ICICI Securities, in line with other emerging markets the foreign portfolio investors flows into domestic equities may continue to remain weak in the ongoing quarter also.
2) Weak Rupee: Rupee fell nearly 10 per cent in the past one year which further dampened market sentiments. The current declined to 68.16 level on Feb 9 from 62.14 on the same day last year. During the year, it hit a high and low of 61.79 and 68.18 on Feb 27, 2015 and Feb 3, 2016, respectively.
3) Global Turmoil: Finance Ministry on Wednesday attributed the fall is domestic equities to turmoil in global economy and said the government is taking measures to address the challenges. “Global economy is in turmoil, markets are down. We know the challenges and are taking necessary measures,” Economic Affairs Secretary Shaktikanta Das tweeted. Dow Jones Industrial Average index and Nikkei 225 slid 10 per cent, 9 per cent, respectively, in the past one year.
4) Falling crude oil price: Crude continued to collapse on the NYMEX and expectation is that the inventory could show a build-up of 3.8 million barrels. The bias for crude is slightly on the bearish side and further weakness in the counter could trigger concerns over extended low inflation in major economies. In the past one year, crude oil price fell over 40 per cent in the international markets.
5) Corporate Earnings: Tepid earning growth of India Inc also dampened market sentiments in the past 12 months.