Indian stock market has been on ventilator from the last few days. A 1,274-point fall in the Sensex made every investor worried about the future approach.
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The Tuesday morning stock market crash in India wiped out Rs.5.4 lakh crore from the market capitalisation of all listed companies in seconds. Benchmark index Sensex plunged over 1,274 points to hit a low of 33,482 during morning trade, before making a rebound. The 30-share index settled at 34,195 at end of trading, 561 points lower than the previous day.
Ritesh Jain, chief investment officer at BNP Paribas Mutual Fund said: “Indian markets are mirroring the freefall in US equities. The start of quantitative tightening by the US Fed, fear of inflation firming up and hardening bond yields led to an increase in US VIX and sent the US market spiralling down in the last half hour of trade with the futures down sharply post market hours. Momentum strategies added to the domino effect.”
The Narendra Modi-led government’s last full Budget ahead of the 2019 Lok Sabha elections projects aggressive revenues – as governments are wont to do. However, the current mood of the stock market suggests that the government may have miscalculated its estimates.