ET Market Watch: Sensex crashes 500 points, 5 factors behind market fall
Hi, you're listening to ET Markets Radio, I am your host Neha V Mahajan. Welcome to a fresh episode of ET Market Watch -- where we bring you the latest news from the world of stock markets every single day. Let's get to it:
Markets took a beating today! Sensex down 500 points, Nifty slips below 25,000. So, what triggered the sell-off? Sensex closed at 81,757. Nifty ended at 24,968. ₹2.6 lakh crore in market value wiped out. Broad sell-off across financials, autos, FMCG, and pharma.
Top 5 reasons behind the fall:
1. FIIs Turn Sellers
After strong inflows in May and June, foreign investors pulled out ₹2,660 crore this month. This reversal in trend reflects growing caution amid global uncertainties, elevated valuations, and a shift in risk sentiment.
2. Axis Bank Misses Estimates
Higher provisions hit profits. Stock fell 5.2%. Hence, Ripple effects were seen across HDFC, Kotak, and SBI, pulling the Sensex down by 391 points.
3. Citi Downgrades India
Citi moves India to neutral, citing overvaluation. Market is at 23x forward earnings, way above peers and historic average. While Citi is positive on India's macro outlook, it prefers sectors like banks, NBFCs, healthcare, and telecoms, and is cautious on IT, metals, and consumer staples.
4. Fed Confusion Continues
Conflicting signals from US Fed officials are hinting at no rate cut in July. Even September's not guaranteed. Hence, the market mood is not that great.
5. Oil Prices Surge
Drone strikes in Iraq push Brent to $70+. This is not good news for oil-importing India, so input cost worries are back.
Is this a healthy correction or a warning sign? Let's watch the global cues next week.
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