Skewed sentiment, liquidity risks, and govt measures failure drowned stock markets

As per the analysts and experts, markets are to be continued in bearish. Nifty will be fluctuating between 11,000 to 11,300 points. FED meeting going to held on 25th Sept 2018 and this meets having an importance because of the expectation of hike in interest rate by 0.25 per cent. Investors expectation may move with some volatility due to September derivative contracts going to close on Thursday i.e., 27th Sept 2018.

SEBI and RBI are announced that regulatory bodies are ready to take proper precautions and remedies if necessary, due to heavy crash in stock markets from the past few days. NBFC’s non-performing assets are showing some risks towards respective industry. 

On Monday – India’s major stock exchange indices continued its slump consecutively on 5th day too i.e., S&P Sensex and Nifty 50 lost 537 points and 176 points respectively. Majorly, Monday crash took over 4 reasons i.e., Crude oil prices achieved 4 months high, NBFC allocation and non-availability of cash and its equivalents, Rupee crash over USD and Derivative contract period closure time. S&P Sensex witnessed all time one day low (537 points crash) in last 7 months. Foreign investments continued their withdrawal from Indian markets if FED meeting hikes interest rates and continues this kind of hike in future.

Open High Low Close
Nifty 50 11,164.40 11,170.15 10,943.60 10,967.40
S&P Sensex 36,924.72 36,945.50 36,216.95 36,305.02

FIIs sold shares worth ₹5. 2 billion, while DIIs purchased shares worth ₹15. 2 billion, as per the provisional data from Business Standard.

On Tuesday – Finally, after five consecutive market days hoped that indices are bounced back with gains and resumed to their loss streak. Markets are fluctuated heavily i.e., 241 points down in the early sessions and 400 points up in after sessions while markets trade. Banking, Pharma, FMCG lifted up the indices because of low level purchases from investors. HDFC and HDFC bank shares demand of purchase are given some boost to the above. On a net basis, FIIs sold ₹12.31 billion worth of shares and DII bought equities to the tune of ₹22.84 billion worth.

LIC Chairman Mr. V.K Sharma assured that are looking for all possibilities to build strong by acquire some more share holding in IL&FS. On the other end, India Ratings downgraded the long-term issuer rating of a group company to “BB”, IL&FS Environmental Infrastructure and Services (IEISL), and placed its ratings under watch. ICRA had given last month junked ratings of most of the group companies.

Open High Low Close
Nifty 50 10,969.95 11,080.60 10,882.85 11,067.45
S&P Sensex 36,350.25 36,705.79 36,064.10 36,652.06

FIIs sold shares worth ₹12. 31 billion, while DIIs bought equities to the tune of ₹22. 84 billion, as per the provisional data from Business Standard.

On Wednesday – Again, another market day closed with slight losses due to stock sales are rioting for banking and FMCG, Investors look over at FED meeting, dull movements in NBFC stocks and closure of derivative contract on Thursday. Punjab National Bank says with exchanges which preparing and going to ask ₹5,431 cores of capital to the government.

Open High Low Close
Nifty 50 11,145.55 11,145.55 10,993.05 11,053.80
S&P Sensex 36,936.64 36,938.74 36,357.93 36,542.27

On Thursday – As expected, investor sentiment got affected by increased 0.25 per cent interest rate and hopes regarding continuation of the hike in interest rate in the future by the FED. Crude oil price increase and Derivative contract close added to the investor sentiment. SEBI asked to submit the investment details by mutual fund companies in NBFCs due to rumours regarding non-availability of cash reserves (liquidity concerns) in NBFCs.

Open High Low Close
Nifty 50 11,079.80 11,089.45 10,953.35 10,977.55
S&P Sensex 36,691.93 36,711.62 36,238.23 36,324.17

On Friday – The Reserve Bank of India (RBI) will meet the Life Insurance Corporation of India (LIC) on September 28 to chart out a course of action for the crisis-stricken IL&FS group. Banking Industry officials and experts say they expect Indian regulators to cancel the licenses of as many as 1,500 smaller non-banking finance companies because they don’t have adequate capital, and to also make it more difficult for new applicants to get approval.

Jaitley said some global trends do “adversely affect” India, but going ahead, they will open up avenues for the country to grow faster. “The trade war initially created instability, but eventually may open up greater markets. They will open up India as a bigger trading and manufacturing base.

The Commerce Minister Suresh Prabhu, Friday said it has constituted and approved a High-Level Advisory Group (HLAG) to look into the challenges emanating from the current global trade scenario and suggest ways to boost the country’s goods and services exports.

Selling in midcaps have been one of the major factors for the market to fall. Auto stock is sold under pressure due to low sales for the past few weeks. Infrastructure, Metals, Pharma, Infibeam burns a big hole in investors pocket and FMCg and Bank Nifty sttod satisfactory. S&P Sensex and Nifty 50 post the biggest monthly decline since October 2008.

Open High Low Close
Nifty 50 11,011.80 11,031.65 10,850.50 10,930.45
S&P Sensex 36,452.74 36,551.86 35,985.63 36,227.14

Finally, this week stock markets closed with loses as S&P Sensex and Nifty 50 continued its losing streak with 614 points (1.84%) loss and Nifty 50 213 points (1.84%) loss respectively.

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