{"id":48540,"date":"2024-11-29T13:40:00","date_gmt":"2024-11-29T08:10:00","guid":{"rendered":"https:\/\/www.equentis.com\/blog\/?p=48540"},"modified":"2024-11-29T15:36:51","modified_gmt":"2024-11-29T10:06:51","slug":"yesterdays-stock-market-panic-nifty-falls-by-361-points-sensex-by-1200-points-8-key-factors","status":"publish","type":"post","link":"https:\/\/www.equentis.com\/blog\/yesterdays-stock-market-panic-nifty-falls-by-361-points-sensex-by-1200-points-8-key-factors\/","title":{"rendered":"Yesterday’s Stock Market Panic: Nifty Falls by 361 points, Sensex by 1200 Points \u2013 8 Key Factors!"},"content":{"rendered":"
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The Indian stock market<\/a> witnessed a sharp plunge on Thursday, November 28, as global<\/a> and domestic concerns gripped investors. The Nifty<\/a> 50 fell by 361 points, slipping below the crucial 24,000 mark to close at 23,914, while the Sensex<\/a> nosedived by 1,200 points, settling at 79,043. <\/p>\n\n\n\n

Amid a tumultuous session, the broader indices, including the Nifty Midcap 100 and Smallcap 100, managed to hold steady, ending flat despite the sell-off in blue-chip stocks.<\/p>\n\n\n\n

What led to this market turmoil? <\/h2>\n\n\n\n

Let\u2019s break it down step by step.<\/p>\n\n\n\n

1. Geopolitical Tensions in the Middle East and Europe<\/strong><\/h3>\n\n\n\n

Escalating conflicts in the Middle East and Eastern Europe rattled investor confidence. The ongoing Israel-Hezbollah conflict intensified after Israel launched airstrikes on Hezbollah positions in southern Lebanon. Simultaneously, the Russia-Ukraine war showed signs of further escalation. These developments triggered uncertainty, leading investors to offload riskier assets like equities.<\/p>\n\n\n\n

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Source: <\/strong>NSE<\/strong><\/a><\/figcaption><\/figure>\n\n\n\n

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2. Weak Global Cues<\/strong><\/h3>\n\n\n\n

A US stock market holiday<\/a> left global markets without clear directional cues, dampening momentum in Indian equities. In the absence of external triggers, profit booking dominated the session. Historically, such periods of low global activity often lead to heightened domestic market volatility.<\/p>\n\n\n\n

3. Pressure from Heavyweight Stocks<\/strong><\/h3>\n\n\n\n

Significant losses in major stocks like Infosys, Reliance Industries, and HDFC Bank dragged indices lower. IT, consumer durables, and automotive sectors faced considerable selling pressure. The Nifty IT index dropped 2.3%, driven by declines in LTTS, Infosys, and HCL Tech. Source: <\/strong>Livemint<\/strong><\/a><\/p>\n\n\n\n

4. Foreign and Domestic Investor Activity<\/strong><\/h3>\n\n\n\n

Foreign Institutional Investors (FIIs) exhibited a mixed bag of activity. After weeks of persistent selling, they made a notable comeback, purchasing stocks worth Rs 11,100 crore over three consecutive trading sessions. This marked a significant turnaround from the 38 straight sessions of net outflows. <\/p>\n\n\n\n

However, the buying momentum quickly faded, with FII purchases slowing down to just Rs 7.78 crore on the third day. This suggests that the recent buying spree may be short-lived, and further selling pressure could emerge in the coming sessions.<\/p>\n\n\n\n

Despite this brief uptick, FPIs remain net sellers in November, offloading equities worth Rs 15,845 crore. This follows a similar trend in October when FPIs sold shares worth Rs 94,017 crore. Year-to-date, FPIs have been net sellers, with total outflows of Rs 9,252 crore.<\/p>\n\n\n\n

Domestic Institutional Investors (DIIs) adopted a cautious approach. They were on the sidelines, awaiting clarity on upcoming policy decisions and the Union Budget<\/a> 2024. DIIs will likely adopt a wait-and-watch strategy until the government’s stance on key economic issues becomes clearer. Source: <\/strong>Economic Times<\/strong><\/a><\/p>\n\n\n\n

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Source: <\/strong>NSE<\/strong><\/a><\/figcaption><\/figure>\n\n\n\n

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5. Strengthening US Dollar<\/strong><\/h3>\n\n\n\n

A robust US dollar added to the market’s woes. Rising dollar rates<\/a> prompted investors to pivot from equities and commodities to bonds and forex markets. This shift reduced liquidity in the equity markets, contributing to the sell-off.<\/p>\n\n\n\n

6. Uncertainty Around US Fed Policy<\/strong><\/h3>\n\n\n\n

Uncertainty regarding the Federal Reserve’s rate trajectory further unnerved markets. Although a December rate cut seemed likely, internal disagreements within the Federal Open Market Committee heightened speculation, impacting global and domestic markets alike<\/p>\n\n\n\n

7. Monthly Derivatives Expiry<\/strong><\/h3>\n\n\n\n

Thursday also marked the expiry of monthly derivatives contracts, which often amplifies market volatility. Traders squared off positions, intensifying the day’s downward momentum.<\/p>\n\n\n\n

8. Profit-Booking<\/strong><\/h3>\n\n\n\n

After a recent rally, the Indian market was ripe for profit-booking. Investors who had made significant gains in the past few sessions decided to take some money off the table, contributing to the downward pressure.<\/p>\n\n\n\n

Market Reaction and Key Data Points<\/strong><\/h2>\n\n\n\n