Weakness was seen in the Indian stock market for the second consecutive day. After fluctuations throughout the day on Tuesday, the Sensex closed at 77,470.11 with a fall of 238.41 points. Whereas Nifty fell by 50.80 points to the level of 24,187.70. Although buying and selling in the market remained almost equal, selling pressure in big stocks dominated, due to which the major indices closed in the red.
Cipla was among the top losers in the day’s trading and slipped nearly 2%. Dr Reddy’s Laboratories and Max Healthcare also fell by more than 1%. Shares of TCS and Infosys remained weak in the IT sector. The auto sector also appeared to be under pressure, where shares of Maruti Suzuki and Tata Motors fell by about 1%. At the same time, before the quarterly results of Bajaj Auto, investors adopted a cautious attitude.
Why did the stock market crash?
The biggest reason for the decline in the market is considered to be the rising prices of crude oil. Brent crude remains around $90 per barrel. Ongoing tensions and geopolitical uncertainties in West Asia have increased investor concerns. For a big oil importing country like India, expensive crude oil can increase inflation, trade deficit and pressure on companies’ profits.
Foreign investors sold
Selling by foreign investors also had an impact on the market. According to preliminary data, foreign institutional investors (FIIs) sold shares worth about ₹1,121 crore. Although domestic institutional investors (DIIs) tried to handle the market by buying about ₹1,312 crore, it was not enough to arrest the decline.
HDFC Bank’s weakness also became a big reason
Shares of HDFC Bank, which have the highest weight in the market, also fell by about 2%. Earlier, there was a huge selloff in the shares of HDFC Bank due to the margins being weaker than expected in its June quarter results. The direct impact of weakness in bank shares was seen on both Sensex and Nifty. Unless the global situation becomes normal and there is no relief in crude oil prices, the period of ups and downs in the stock market may continue. However, quarterly results of strong companies will play an important role in deciding the future direction of the market.
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