Taking Stock | Market sees worst fall in 2 months; Sensex plunges 872 pts, Nifty ends below 17,500
On August 22, equities were once again subjected to heavy selling, resulting in indices closing in the red for the second day in a row. Furthermore, it was the market’s biggest drop in two months.
Selling was seen across the board because of weak global markets and a rising dollar index, as investors remained concerned about the possibility of the Fed continuing its aggressive rate hikes.
After a shaky start, the benchmarks extended their losses, falling more than a percent before closing near the day’s low.
The Sensex was down 872.28 points, or 1.46%, at 58,773.87 at the close, while the Nifty was down 267.80 points, or 1.51%, at 17490.70.
“The market has been consolidating in anticipation of the Fed tightening monetary policy and concerns about a slowdown in global economic activity,” said Vinod Nair, Head of Research at Geojit Financial Services.
“The current risk-reward is not favouring investors as the Nifty50 is now trading at a premium valuation of 21.5x P/E (1yr fwd basis), above the long-term average. The rising dollar index and higher US10 year bond yield act as the near-term headwinds for the market,” he added.
Tata Steel, Asian Paints, Adani Ports, Tata Motors, and JSW Steel were among the major Nifty lowers.
The gainers were ITC, Coal India, Tata Consumer Products, Nestle India, and Britannia Industries.
“The current risk-reward ratio does not favor investors, as the Nifty50 is trading at a premium valuation of 21.5x P/E (1yr fwd basis), which is higher than the long-term average.” The rising dollar index and higher 10-year US bond yields are acting as near-term headwinds for the market,” he added.
Among the major Nifty losers were Tata Steel, Asian Paints, Adani Ports, Tata Motors, and JSW Steel.
ITC, Coal India, Tata Consumer Products, Nestle India, and Britannia Industries benefited.