It has been a shocking scenario, few days since Sensex hit the 30,000 mark on 4 March. Today, Sensex came crashing down to the level of 28,000 which was the lowest it has been in more than 2 months. The fall was quite surprising since the government had just passed critical legislations such as bills on coal and insurance. Globally speaking, the US Fed is not in any hurry whatsoever to increase rates. Additionally, the rupee remains stable in spite of the turmoil affecting currency markets worldwide.
One of the major reasons that contributed to the fall is the lack of further positive movements in the market which could have taken the markets higher. At the same time, corporate earnings are not meeting the valuations of the markets in India. Corporate earnings had been the major contributor to the rise of the Sensex to the level of 30,000.
Experts have pointed out that the earnings in some sectors in the upcoming fourth quarter will possibly see deteriorations. It is likely that the scenario of weak earnings will continue into the fourth quarter.
Investors from foreign institutions have yet to sell their Indian stocks. Be that as it may, domestic individuals with a high net worth have started selling off stocks as they anticipate the markets to fall even further in the coming days. According to analysts, many investors are possibly holding cash in order to get a lowered market than what is available currently.
The Indian markets have decreased below critical levels of technical support. This can trigger more pressure to sell. According to Imtiyaz Qureshi, the cofounder and director of Investeria Financial Services, Nifty has already broken the record of the 100-day moving average which was 8530 previously for the first time from the start of the Narendra Modi government.