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5 Reasons That Led To Sensex Over 400 Points Fall Today
Equities in India are again on a downward trajectory for the fourth straight session on February 18, 2020. The losses are on the back of weak global cues and domestic factors including rise in coronavirus deaths, Moody's downward revision of GDP estimate etc.:
Here are some of the major reasons:
Heavyweights drag:
Indices heavyweight stocks including the likes of HDFC twins (HDFC Bank and HDFC), RIL, IndusInd Bank, ITC and Maruti were some of the major stocks that pushed Sensex over 400 points lower.
Banking stocks drag after Voda Idea likely collapse due to AGR verdict:
The honourable Supreme Court did not brought any relief to the ailing telecom companies who sought revision in AGR dues repayment. The move despite hitting the telecom company i.e. seen to likely collapse also posed a severe blow to some of the banking stocks that had a heavy exposure in the stock. Following the verdict, some 7 banking names were hit hard.
Moody’s downward revision of GDP for FY20:
On Monday, Moody's Investors Service slashed India's GDP growth for FY20 to 5.4% from 6.6% earlier. The downward estimation is on account of the country's slower than expected economic recovery. Nonetheless, the company expects economic recovery to begin from the current quarter.
Coronavirus toll jumps:
The deaths due to epidemic coronavirus have again surged by 98. This is even when the number of newly reported cases have slowed to below 2000 as of Monday. And this threat which is said to cast an impact on global economic growth has weighed on stock markets world across.
"Continuous rise in corona cases has forced major Asian peers to downgrade their growth outlook which could cause a ripple effect in other nations in the first quarter while recovery is expected from the second," Vinod Nair, Head of Research at Geojit Financial Services said
Weak Asian markets:
iPhone maker Apple has issued a statement wherein it said that the company is unlikely to meet the sales target released three-week ago in a scenario where production has lost ground and there is a deceleration in demand for the product in China, which in the year ago quarter contributed as much as 18% to the company's revenue. On the news, Asian stocks fell, Japan's Nikkei also dragged 1%, Shanghai lost 2% and MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.65 per cent.
