On Friday, Nifty companies like Sun Pharma fell around 4 per cent, while Maruti Suzuki, Titan, Cipla, JSW Steel, Power Grid and ONGC closed down around 2 to 3 per cent. Pharma stocks were the biggest losers with Nifty Pharma falling by about 1.7 per cent.
There was a big fall in the stock market on Friday. Bombay Stock Exchange’s main index Sensex closed down by 793 points, while Nifty also saw a decline of about 1 percent. According to sources, there has been selling of blue chip companies by foreign investors. There is news that investors from Mauritius may now have to face more scrutiny. Smallcap and midcap indices remained far away from selling.
On Friday, Nifty companies like Sun Pharma fell around 4 per cent, while Maruti Suzuki, Titan, Cipla, JSW Steel, Power Grid and ONGC closed down around 2 to 3 per cent. Pharma stocks were the biggest losers with Nifty Pharma falling by about 1.7 per cent. All sectoral indices closed in the red. Nifty Bank, which touched the 49,000 mark for the first time, also closed around 0.86 percent weaker.
Due to this selling, stock market investors suffered huge losses and the market cap of BSE came down to Rs 400 lakh crore. Investors have suffered a loss of Rs 2.51 lakh crore today. The market cap of BSE is visible at Rs 399.68 lakh crore. Let us also tell you what are the reasons due to which there has been a decline in the stock market.
Selling by foreign investors
The biggest concern for foreign investors at this time may be the implementation of a protocol for revision of the India-Mauritius tax agreement, after which FPIs may have to face more scrutiny. Mauritius is the fourth largest source of FDI in India and accounts for about 6 percent of the total FPI assets in the country.
American inflation
Higher than expected inflation data in the US has reduced expectations that the Federal Reserve will start cutting interest rates in early June. Wall Street traders now expect the probability of the Fed cutting rates in June at 23 percent, up from about 62 percent a week ago.
Increase in bond yield
Due to higher than expected US inflation, US bond yields have increased. The two-year US yield rose above 5 percent for the first time since November. The 10-year yield reached its highest level in five months. High yield is not positive for FPI flows, but experts suggest that due to high domestic liquidity, buying can be done on dips.
valuation stress
The long term scenario on India remains bullish. Given the fact that the market is at an all-time high, investors have become very cautious on valuations. Amit Goyal of Pace 360 said in the media report that due to the huge increase in valuation, we are advising investors not to invest until there is a major correction in the market.
Profit booking by investors
In this bullish period, investors are also booking profits and making changes in their portfolio. The market’s focus will be on March quarter earnings which has started with TCS from today. Vinod Nair of Geojit Financial Services said in a media report that earnings growth in India is showing signs of deceleration, with EPS growth expected to be 5-10 per cent in Q4 compared to the strong 25 per cent experienced between April and December 2023. Is.
Increase in crude oil prices
Prices of various commodities like gold, silver, zinc, copper, cocoa and coffee are increasing. Apoorva Sheth of Samco Securities said in the media report that increasing prices of goods means increasing inflation. If inflation increases then central banks have no other option but to increase interest rates. The way the prices of crude oil are increasing. This means that the international market will have to face high inflation in the coming days.