On May 9, benchmark indices experienced a sharp decline, with the NSE Nifty 50 dropping below 22,000 and the BSE Sensex plummeting by over 1,000 points. Both indices started the day on a downward trajectory and continued to fall over 1 percent during intraday trading.
This marks the fifth consecutive day of sell-offs for the headline indices. Several factors, including ongoing Lok Sabha elections, lackluster Q4 results for the 2024 season, and rising crude oil prices, have contributed to this prolonged downturn.
In the broader market, the BSE Midcap index fell nearly 1.8 percent, while the BSE Smallcap index saw a decline of over 2.1 percent.
Throughout May, foreign institutional investors (FIIs) have consistently been offloading shares, with a significant net sell-off recorded on May 8 amounting to Rs 6,669 crore.
Several factors have contributed to the downturn in Indian equities:
- Election Uncertainty: Despite expectations of a victory for the BJP-NDA alliance in the Lok Sabha elections, lower voter turnout has raised doubts about the expected seat count. Political comments and developments continue to influence market sentiment.
- Underwhelming Q4 FY24 Earnings: The Q4 2024 earnings season has failed to generate significant buying activity on Dalal Street, lacking notable surprises.
- US Fed’s Hawkish Stance: Recent hawkish comments from certain US Federal Reserve officials have added pressure on Indian equities, contributing to a rally in the US dollar index and rising Treasury yields.
- Oil Price Volatility: Modest increases in oil prices, driven by a mixed snapshot of US inventories, have contributed to market uncertainties.
- Expiry of Derivative Contracts: The weekly expiry of Nifty options contracts has heightened volatility as traders adjust their derivative positions.
Looking ahead, investors are closely monitoring US economic data, particularly inflation figures, against the backdrop of Federal Reserve policies and global market trends.
Disclaimer: The views expressed by investment experts on LegalParivar.com are their own. Readers are advised to seek advice from certified experts before making investment decisions.
