Never miss a great news story!
Get instant notifications from Economic Times
AllowNot now

You can switch off notifications anytime using browser settings.
Stock Analysis, IPO, Mutual Funds, Bonds & More

Sensex cracks over 300 points: 5 factors that spooked D-Street bulls

Going with market buzz, here are the five reasons that took market off its record high.

Updated: Nov 07, 2017, 03.36 PM IST
Watch: Sensex tanks 360 pts; Nifty below 10,400
NEW DELHI: Benchmark equity indices BSE Sensex and NSE Nifty slipped over 1 per cent on Monday on account negative domestic as well as global cues. The 30-share Sensex tumbled nearly 400 points in the second half of the session, while NSE Nifty index lost the crucial level of 10,400.

Going with market buzz, below are five reasons that took market off its record high:

Profit booking: Profit taking in select sectors dragged benchmark equty indices BSE Sensex and NSE Nifty down over 1 per cent in the afternoon trade. The BSE Healthcare, Realty, Consumer Durables and Energy index fell over 2 per cent. Other indices including Metal, Power, Bankex and Telecom were also down between 1 per cent and 2 per cent.

Rising crude oil prices: Strengthening crude oil prices in the international markets further dampened market sentiments on D-Street. The black gold on Monday hit over 2-year high level since July 2015. OPEC is aiming to lift oil prices to $70 per barrel. Increasing crude prices can lead to prices of crude derivatives moving up impacting raw material prices. According to market experts, every $1 per barrel rise in crude oil prices inflates India’s import bill by $1.33 billion, which can potentially put downward pressure on the domestic currency.

Stock-specific action: Heavy selling in Lupin and Cipla also added some pressure on benchmark indices. Lupin was trading nearly 18 per cent down after the drug maker said it has received a warning letter from the USFDA for Goa and Indore plants. Cipla slipped nearly 6 per cent post Q2 results. Some selling in Sun Pharma, State Bank of India and Reliance Industries also dampened market sentiment.

Technical factor: Lack of confidence among investors weighed in on the domestic market in the previous trading session, as the Nifty50 closed in the red despite rebounding smartly from the day's low. In the process, the index formed a 'Shooting Star' pattern on the technical chart, as it continued to make higher highs and higher lows. Analysts see multiple confluences in the 10,500-10,600 range, which the Nifty50 could find difficult to breach. Mazhar Mohammad of on Monday predicted that if the Nifty50 index slips below the 10,400 level, it can attract more selling pressure.

Selling by DIIs: Domestic institutional invetors, which were protecting markets from any downside, suddenly turned net sellers in domestic equity markets. They have sold shares worth Rs 1,350 crore in November so far.

Also Read

YES Bank shares fall 2% on Sensex rejig

Sensex, Nifty trade lower; Infosys slips 3%

Why is Sensex rallying despite poor health of the economy?

Sensex, Nifty open with gains; Infosys plunges

Sensex plunges 334 pts as fiscal deficit concerns spook investors

Add Your Comments
Commenting feature is disabled in your country/region.
Download The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.

Other useful Links

Follow us on

Download et app

Copyright © 2019 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service