Share Market: Sensex reaches all time high, slips more than 850 points, Nifty below 21,200, know what is the reason

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Why Market Stock is Falling: The Indian stock market fell sharply on Wednesday, after a historic rise. The 30-share BSE Sensex pack fell over 850 points, while the broader NSE Nifty index was seen below 21,200. The improvement in domestic benchmarks came due to higher level of profit-taking and increase in Covid-19 cases in the country. In early trade, Sensex jumped 476 points to reach all-time high of 71,913 and Nifty reached its new record peak of 21,593. The huge fall in the stock index came in late deals today.

These are the main reasons behind the decline in the stock market

• Bank, Metal and Auto Stock Tank

  All 15 sector gauges compiled by NSE were trading in the red. Sub-indices Nifty PSU Bank, Nifty Metal and Nifty Auto were weak on the NSE platform, falling 3.66 per cent, 3.67 per cent and 2.18 per cent respectively.

• Increase in Covid-19 cases

  According to Union Health Ministry data, India recorded 614 fresh infections in the last 24 hours, the highest since May 21. The increase in cases is due to the Covid sub-variant JN.1, which was first found in Kerala. Earlier, after a case of the Covid sub-variant was detected in neighboring Kerala, Karnataka had asked people above 60 years of age with co-morbidities and those suffering from cough, phlegm, etc. to wear face masks mandatory. And was suffering from symptoms of fever.

• FII-DII data

  Foreign institutional investors (FIIs) sold Indian shares worth Rs 601.52 crore on a net basis during the previous session, while domestic institutional investors (DIIs) bought shares worth Rs 294.35 crore.

Sharp declines were seen in Nifty Midcap and Nifty Smallcap indices, with each falling about 2%. Only the FMCG sectoral index was trading in the green. Whereas, bank and IT indices were trading around 0.5% lower. A sharp decline was seen in auto, media, metal, PSU bank and realty stocks. After a sustained rally over the past few days, valuation parameters and technical indicators are indicating further consolidation. Historical data shows that December has seen a correction or consolidation after positive growth during the lead period. According to an ET report, market participants are also keeping an eye on the increasing cases of Covid sub-variant JN.1 in India. Kerala recorded 292 new active cases of COVID-19 and 3 deaths yesterday. Union Health Minister Mansukh Mandaviya stressed the need to remain alert against emerging variants of coronavirus and reviewed the preparedness of health facilities. However, the pharma index also fell by more than 1%. Japan’s Nikkei 225 was trading up 1.5%, while London’s FTSE 100 was up 1%. US 10-year and 2-year bond yields fell by more than 100 bps, and Brent crude oil prices were still trading below the $80 level.

What do experts say

Ahead of the assembly election results in five states, the first 10 days of December saw a decline, followed by a rise in the next 10 days, followed by consolidation in the rest of December, said Anand James, chief market strategist at Geojit Financial Services. . Market experts had warned of a possible bubble in the smallcap sector. PMS fund manager Siddharth has temporarily suspended inflows of funds into domestic PMS and AIF funds due to concerns about valuations and the creation of bubbles in the IPO and SME markets.

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