Nifty Hits Fresh 52-Week Low: Why Share Market Down Today?

After starting on a positive note, indices have taken a knock for the 5th straight day. This is even as the crucial Federal Reserve outcome had been more or less discounted and was on expected lines. At the time of writing this report at around 1:28 pm, Nifty was down by 1.8% or 277 points at 15,414.9, while Sensex also gave up over 920 and traded at 51,619. In trade today, Nifty has hit a fresh 52-week low of 15,397.45 and is down over 11% on a YTD basis. Similar has been the pressure on Bank Nifty whereas broader markets underperformed headline indices.

Reasons for market fall today:

Aggressive balance sheet tapering by the US Fed to be negative for global equities:

In the latest Fed outcome, the US Fed on expected lines delivered a rate hike of 75 bps and also ensured a similar kind of hike in the following month. Moreover, the Fed Chair provided a clear message that "we have the tools and resolve to achieve price stability". Also, the balance sheet tapering by a faster quantum will also be highly detrimental for the world over equities.

In the same regard, the work on tapering its around $9 trillion balance sheet has moved ahead.

FPI continued selling:

FPIs have been net sellers so far and have sold over Rs. 1.81 lakh crore in the Indian equities till June 11, 2022. "The domestic market will continue to be dominated by global trend & FPI selling may continue in the near term; however, we expect a moderation in FIIs selling during the short to medium-term", Vinod Nair, Head of Research at Geojit Financial Services is quoted as saying in a leading dailies.

Nifty stocks languish

While writing from the Nifty pack which primarily constitute bluechip stocks, 48 stocks were trading with a cut of over 4% as for stocks like ONGC, Tata Steel. The only gainers from the pack have been Britannia and Maruti.

So, at this point where markets will be highly volatile, experts advice to lap up quality names with a long term view.

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