In today’s trading, midcap and smallcap stocks bucked the trend and rose 0.3% and 1.1% respectively. On the other hand, IT stocks, which are heavily dependent on US companies, fell 1.2%, while metal and auto indices also weakened. Among individual gainers, newly listed edtech player PhysicsWallah fell 2.4% despite a sharp rise in quarterly profit. On the other hand, Kaynes Technology rose almost 15%, recovering from last week’s heavy losses.
Now let’s look at the main reasons behind the current market weakness.
First, nervousness ahead of the US Fed meeting kept investors defensive. While most expect a 25 basis point rate cut, fears of a surprise hold have made investors wary. A stronger dollar and a weaker rupee have only added to domestic concerns.
Second, global signals were weak. Asian markets remained subdued as investors awaited several central bank decisions this week. The MSCI Asia-Pacific index fell 0.28%, reflecting weakness on Wall Street.
Third, foreign institutional investors continued to sell Indian equities, selling nearly Rs 656 crore on December 8, extending their withdrawal streak into December.
And finally, volatility rose due to the weekly expiry of Nifty’s derivatives, in addition to continued pressure from a weakening rupee, which touched 90.15 against the dollar before recovering slightly.
Overall, a mix of global uncertainty, foreign outflows and currency pressure weighed on investor sentiment today.
That’s all for now on ET Market Watch. Stay tuned for more market updates, here on ET Markets Radio.
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