Markets Plunge: Sensex Crashes 1,272 Points in Largest 2-Month Drop | Urgent Stock Market Update
Benchmark Indices Experience Sharp Decline Amid Global Headwinds
Published: Sep 30, 2024 | 11:33 PM IST
Benchmark indices saw their most significant single-day drop in nearly two months, spurred by various global challenges that prompted a substantial selloff by foreign portfolio investors (FPIs).
A quick rebound in China’s markets has raised concerns about capital shifting from India, whose valuations are nearly twice as high as other emerging markets. Growing tensions in West Asia, following Israeli strikes in Lebanon, and a downturn in Japanese markets have further dampened investor sentiment. Market participants were also anxious about impending tighter regulations on derivatives trading.
On Monday, FPIs withdrew almost Rs 10,000 crore from Indian markets. The Sensex plunged 1,272 points or 1.5 percent, closing at 84,300, while the Nifty 50 index fell 368 points or 1.4 percent to end at 25,811, marking its steepest decline since August 5. The collective market valuation of BSE-listed firms shrank by Rs 3.6 trillion to Rs 474 trillion.
China’s recent stimulus measures and the subsequent rise in Chinese stocks have caught investor attention. The size of these measures has fueled strong market confidence, leading to a surge as investors, driven by fear of missing out and seeing low valuations, jumped back in, noted Mark Mobius of Mobius Investments in his blog.
The benchmark Nifty trades at a one-year forward price-to-earnings (PE) ratio of 21.5, compared to China’s Hang Seng and Shanghai Composite at 9.4 and 11.5, respectively. On Monday, the Hang Seng climbed 2.4 percent, and the Shanghai Composite Index soared 8.06 percent post-Beijing’s stimulus actions.
U R Bhat of Alphaniti Fintech observed that FPIs are shifting profits from India to capitalize on Chinese opportunities, citing the significant gains made in India recently.
Japan’s markets tumbled 5 percent after the appointment of Shigeru Ishiba, known for his hawkish monetary stance, as Prime Minister. Additionally, tensions in West Asia escalated as Israel killed Hezbollah leader Hassan Nasrallah in Beirut, further fueling market concerns over possible disruptions in the Strait of Hormuz impacting oil prices.
Domestically, markets had been riding high due to a 50 basis-point rate cut by the US Federal Reserve. However, experts see some profit-taking as healthy, given that some segments were overextended. Investors also remained cautious ahead of the upcoming corporate earnings reports for the September quarter and crucial global monetary policy decisions, including the US non-farm payroll data set to be released on Friday.
Market breadth was weak, with 2,306 stocks declining versus 1,749 advancing. Reliance Industries, dropping 3.2 percent, was the largest contributor to the declines.
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Original Story https://www.business-standard.com/markets/stock-market-news/markets-log-biggest-fall-in-2-months-sensex-ends-1-272-points-lower-124093001203_1.html
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