What's behind the sharp drop in Indian stocks today
India's benchmark equity indices, the Sensex and Nifty 50, opened lower on Wednesday. This downward trend was influenced by a significant sell-off in global markets. During early trade, the Sensex had dropped by 560 points or 0.7% to stand at 81,995 while the Nifty 50 had fallen by 187 points to reach at 25,092.
IT and banking stocks pull down Nifty
All 13 sectoral indices opened in the red, with IT and banking stocks exerting downward pressure on the Nifty. Anand James, Chief Market Strategist at Geojit Financial Services, suggested that the Nifty could either sharply decline to 24,440 or potentially limit its downfall at 24,800. This prediction indicates a potential further drop in India's equity market.
Global crude oil prices witness significant drop
In other market news, global crude oil prices have seen a significant drop. Brent is now trading at nearly $73 per barrel while US West Texas Intermediate (WTI) crude futures have slipped below $70. This decrease in oil prices is being viewed as an indicator of a slowdown in the US economy, adding to the existing market volatility.
US stock markets slump amid economic concerns
US stock markets also experienced a significant slump with the three major indices recording their biggest daily percentage declines since early August. This was due to a fall in chip stocks and weak economic data that sparked fears of a recession. NVIDIA's stock tanked 9.5%, resulting in a loss of $279 billion from the chipmaker's market capitalization. This single-day plunge in market value is the largest ever recorded for a US company.
Asian indices mirror US market declines
Asian indices have mirrored the sharp declines in the US market, further contributing to global market instability. However, defense stocks in India such as Hindustan Aeronautics, Cochin Shipyard, Garden Reach and Mazagon Dock traded higher after the Defense Acquisition Council (DAC) approved major procurements worth ₹1.4 lakh crore for the Armed Forces.
