Bombay Stock Exchange (BSE) building in Mumbai. Photograph:( Reuters )
It was a day of weak trade on the Dalal street as bears took complete control over bulls.
The recent North Korea bombing threats and low confidence in the Indian economy have spooked Indian markets today. It was a day of weak trade on the Dalal street as bears took complete control over bulls.
The Nifty closed below its key psychological 10,000-mark and the broader markets cracked 3 percent. Indian markets were tracking global weakness after North Korea threat indicated another hydrogen bomb test and s&p downgraded China's credit rating.
It was across the board sell-off led by metals, realty, banking & financials, and infra stocks but the nifty it outperformed with a marginal loss of 0.2 percent. The 30-share BSE Sensex plunged 447.60 points or 1.38 percent to 31,922.44 and the 50-share NSE nifty lost 157.50 points or 1.56 percent to 9,964.40.
The broader markets fell more than benchmarks today as the BSE midcap and smallcap indices cracked nearly 3 percent each on weak breadth. About four shares declined for every share rising on the BSE. However, the broad five reasons for markets falling are as follows
North Korea concerns
Geopolitical concerns over the Korean peninsula have remained under the spotlight as the trump administration has attempted to put more pressure on North Korea. Adding to the uncertainty is the fresh threat from the rogue nation about nuclear warfare.
Asia's growth engine China is faltering and the recent downgrade by s&p has raised doubts on China's economic prowess. Developments around China kept the market on its feet after its rating was downgraded.
Likely stimulus for Indian Economy
Indian markets could have been jittery over the economic prospects after the government announced plans to boost the economy. The Indian government is considering a plan to loosen the fiscal deficit target so that it could spend an additional Rs 50,000 crore ($7.7 billion) in the financial year ending in March 2018, two government sources said on Thursday.
Growth in Asia's third-largest economy India has slowed to a three-year low of 5.7 percent in the quarter that ended in June, and finance minister Arun Jaitley said on Wednesday that the government was looking for ways to speed it up.