The markets saw a sudden sell-off in matter of 15-20 minutes. The Sensex nosedived over 1000 points in intra-day trade and is now trading around the 76,300 mark, down nearly 1.5%. The Nifty too has plunged over 1 per cent lower. The key sectors that are seeing significant selling pressure include financials, banks and technology stocks. The Bajaj Twins, Bajaj FinServ and Bajaj Finance along with Striram Finance, HDFC Bank and Infosys are among the key losers on the Nifty.
Why is the market falling?
The gold prices have soared to new highs indicating investor caution and safe haven buying. That apart there some key reasons why the market is falling today.
Potential redemption pressure
Given the sudden nature of the fall, many market participants believe that there could be redemption/selling pressure from key institutional investors. According to market expert Deepak Jasani, “there is uncertainty in the market. As investors await for clarity on Trump tariff, the bout of selling pressure by institution investors, profit taking and redemption ahead of so called ‘Liberation day’ led to a sharp fall.”
Trump tariff comes into effect on April 2
The uncertainty surrounding Trump Tariff is perhaps one of the biggest overhang for the markets. Investors are taking a cautious stance in anticipation of the April 2 US reciprocal tariffs. The Tariffs may impact a whole cross section of sector from auto to pharma, gems and jewellery and even the chemicals sector. However, given all the threats and counter-threats investors are now risk averse and waiting for the exact details of the new tariff structure.
Tech stocks under pressure
Tech stocks are under significant pressure. The Nifty IT Index is down over 2% in trade today. They are mirroring trend seen in US markets last evening. OT stocks weighed on the Nasdaq in yesterday’s trade. Higher than expected US Inflation and weak consumer data reinforced concerns about the health of the US economy as well as the possible revival in the demand scenario.
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