Sensex and Nifty traded with huge volatility in today's trade and closed lower, with Sensex down 300 points to close at 38,031 points while Nifty also went down by 80 points to close below 11,350 mark. Here are the 5 major reasons which pulled the indices down in trade today.
1. FPIs selling in the market: The imposition of surcharge on super rich which also includes 40% of FPIs that invests into India. And the selling this month has been humongous given the Thursday's call by the FM who declined to yield in to the demands of withdrawing surcharge of FPIs. Further, Sitharaman reiterated that if they wish to get away from the tax, they need to adopt a corporate structure.
2. Rupee weakening: Rupee has also weakened during the day to levels of 68.99 as dollar has been upbeat as traders in the market are moving away from the previous take of 0.5% rate cut by the Federal Reserve later in the month. Rupee in trade today has weakened beyond 69 levels.
3. Earnings disappointment: HDFC twins which happen to be the heavyweights were the biggest loser in trade today due to increase in provisions and moderation in the bank's loan growth for the quarter ended June' 2019.
3. Oil prices are also rising: Due to spat in the West Asia after a tanker was taken off by the Iranian military, crude oil has been on the rise, and this is once again pointing to concerns relating to inflation and fiscal slippages.
4. Global cues also weighed: Asian stocks have been trading with ease as investors resorted away from the previous hope of a 50 basis point rate cut by the Federal Reserve thus slipping from the earlier aggressive policy stance which the Federal Reserve may resort to.