Today's trading session in the stock market was no less than a rollercoaster ride for investors. The brightness that was visible on Dalal Street as soon as the market opened in the morning faded to a great extent by the afternoon. Common investors, who were heaving a sigh of relief after seeing their portfolios in the green in the morning, were surprised by this upheaval in the market within a few hours. Within no time, the Sensex plunged by nearly 700 points from its highest level of the day. Let us understand why the spectacular rise in the morning could not last till the afternoon and what is the real story behind this sudden decline.
The beginning of the day was wonderful. The enthusiasm of investors was at its peak and on this basis the Sensex took a strong jump of 997.25 points (about 1.3 percent) and reached the level of 77,910.75. Nifty was also not behind, it had reached very close to the important level of 24,300 with an impressive gain of 292.75 points (1.2 percent). But this enthusiasm of the market could not last long. By 1:08 pm the whole picture had changed. The lead of Nifty reduced to only 107 points and it came to the level of 24,104. At the same time, Sensex also lost most of its gains and was seen struggling at 77,276 with a rise of just 354 points.
The biggest reason for the sudden rise in the market this morning was the trends of West Bengal Assembly elections. In the initial trends, Bharatiya Janata Party (BJP) had taken a good lead against the ruling TMC. This was exactly what was predicted in most of the exit polls on April 29. The market likes political stability, so it welcomed this news with open arms. But, this happiness proved to be very short-lived. According to VK Vijayakumar, Chief Investment Strategist, Geojit Investments, the impact of the election results was definitely visible on the market, but investors soon realized that this enthusiasm was short-lived. The eyes of the market have now shifted from domestic politics to global concerns.
A major reason for the market's slide by afternoon was profit-booking by investors. In the morning, when the major indices rose by more than one percent, investors took advantage of this high price and booked their profits. Under this heavy selling pressure, the shares suddenly started sliding downwards. Apart from this, foreign institutional investors (FIIs) are also continuously withdrawing their money from the Indian market. If we look at the figures of Thursday itself, he had made a huge sale of shares worth Rs 8047 crore. Due to this attitude of foreign investors, the market sentiment has weakened considerably, the direct effect of which was clearly visible in today's fluctuations.
There may be some good news on the domestic front, but our market cannot remain untouched by global tension. The ongoing tension between America and Iran has raised lines of worry on the foreheads of investors around the world. This geopolitical tension is having a direct and negative impact on the Indian currency. Today, a weakness of 11 paise was recorded in the Indian Rupee against the Dollar and it fell to the level of 94.95. A weak rupee discourages foreign investment. Along with this, Brent crude oil in the international market also remains at a high level of $ 110 per barrel.
