4 Reasons Why Markets Snap 4 Straight Days Of Gains

Indian indices have been trading with losses after four straight days of gains on weak global cues. At the time of writing this copy, Sensex was down 396 points or 0.8% at 49109, while Nifty shed 106 points to trade at 14836. Broader markets though outperformed the headline indices with Nifty Midcap 100 up 0.57%.

Here are the likely reasons for today's fall in the Indian stock market:

1. Asian markets sluggish in trade on May 11, 2021:

As the US markets in overnight trade witnessed sell-off in tech stocks and ended lower, Asian peers in line fell sharply. All of the Asian markets indices were down with Taiwan leading decline across the region, down more than 4 percent. Other Asian indices that toppled sharply include Japan's Nikkei down over 3 percent and Hong Kong's Hang Seng down over 2%, while South Korea's Kospi was down more than 1 percent.

2. Metals, banking and financial drag the most:

Huge selling is being witnessed across sectors, with metals, financial and banking pack dragging the most. Nifty IT and Nifty FMCG were also down in trade up to over 0.75%. Nonetheless, major losses came from the metal space which shed more than 1.5% at the time of writing this report, with drag coming from stocks like JSW Steel, Hindalco and SAIL among others.

3. Slow vaccination pace:

Currently even as the Indian markets seem to ignore worsening Covid 19 situation, given the grim pace at which vaccination across the country is taking place, it may result in sharp spike in Covid 19 cases and may impact economic recovery, which will weigh on Indian markets.

4. Technical view:

Formation of a bullish Doji kind of candle on the Nifty50 suggests indecisiveness among investors. The trading range was narrower than the previous session, which is likely a hint of a slowdown in the upward journey as well as profit taking. Analysts advise traders to look for stock-specific opportunities.

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