Indian Markets Drop as Global Concerns Rise: Insights from Ajay Bagga
Indian markets started the week with a decline due to weak global cues and downturns in Asian markets. The Nifty 50 index on the National Stock Exchange opened negative with a decline of 28 points or 0.12 per cent at 24,823 points, while the BSE Sensex opened at 80,973.75, down by 210 points or 0.26 per cent.
Ajay Bagga, a Banking and Market expert, explained, “Eight days of volatility are assured for the markets as the Fed rate cut of Sep 18th comes within striking distance. The seasonality of poor September performance of markets is playing out as per expectations. On top of that, the slowdown in China and Germany is adding to global growth worries.”
In the broad market indices on the National Stock Exchange, all major indices except Nifty MicroCap 250 opened in the negative. In the sectoral indices, Nifty FMCG, Nifty Media, and Nifty PSU Bank gained, while the other indices declined.
Bagga added, “For Indian markets, the impact is coming via FII selling. The good news is that despite the net FII outflows of over Rs 5.5 lakh crore from Jan 2022 to August 2024, the Rs 11 lakh crore plus of robust domestic inflows have meant every dip has been bought into in the Indian markets. We expect a couple of weeks of this volatility, but don’t expect sharp cuts in the Indian markets given the domestic liquidity sitting on the sidelines.”
Asian stock markets also plummeted on Monday as selling pressure mounted after lower-than-expected US payroll growth. Japan’s Nikkei 225 index declined by 1.84 per cent or 632 points, while Hong Kong’s Hang Seng was down by 1.73 per cent or 301 points. Taiwan’s major index, Taiwan Weighted, declined by more than 2 per cent, and South Korea’s KOSPI index plummeted by 1.15 per cent.
Overall, a selling sentiment was witnessed among investors in the Asian markets. Concerns of a slowdown in China and Germany have added fuel to the selling in stocks, which were already volatile due to Fed rate cut expectations.
Indian stock indices took a sharp hit on Friday, the last trading day of the current week, with all sectoral indices closing deep in the red. The sell-off was broad-based, with the banking and energy sectors taking the biggest hit. Nifty 50 dropped 292.95 points, or 1.17 per cent, to 24,852.15, while the BSE Sensex fell 1,017.23 points, or 1.24 per cent, to 81,183.93.
Doubts Revealed
Indian Markets -: Indian Markets refer to the stock exchanges in India where people buy and sell shares of companies. The two main ones are the BSE (Bombay Stock Exchange) and NSE (National Stock Exchange).
Global Concerns -: Global Concerns mean worries or issues that are affecting the whole world, like economic problems in big countries or political tensions.
Nifty 50 -: Nifty 50 is a stock market index in India that shows the performance of 50 major companies listed on the National Stock Exchange (NSE).
BSE Sensex -: BSE Sensex is another stock market index in India that tracks the performance of 30 well-established companies listed on the Bombay Stock Exchange (BSE).
Ajay Bagga -: Ajay Bagga is a market expert who knows a lot about how stock markets work and often shares his insights on financial news.
Fed meeting -: The Fed meeting refers to the meetings held by the Federal Reserve, which is the central bank of the United States. They make important decisions about interest rates and the economy.
Foreign investor outflows -: Foreign investor outflows mean that investors from other countries are taking their money out of the Indian stock markets.
Domestic inflows -: Domestic inflows mean that people and institutions within India are putting their money into the Indian stock markets.
Asian markets -: Asian markets refer to the stock markets in Asian countries like Japan, Hong Kong, Taiwan, and South Korea.