Sensex plunges by more than 900 points on Wednesday; heres why

Sensex plunges by more than 900 points on Wednesday; heres why

Geyatee Deshpande
/ Categories: Trending, DSIJ News

On Wednesday, the domestic stock markets were covered in red as Sensex tumbled by more than 900 points to close at 4,740.93 levels. Meanwhile, Nifty left its 14,000 mark, dropping by 271.40 or 1.91 per cent as compared to its previous close and settled at 13,967.50 levels.  

As bears caused a ruckus in the markets, Dalal Street turned negative for 2021 due to these reasons: 

Q3FY21 earnings  

The Q3FY21 earnings season had begun on a high note with the tech majors and other investors’ favourites reporting strong Q3FY21 results. However, now, investors seemed to have been spooked out as recently, many companies reported lower-than-expected Q3FY21 results. Additionally, the higher level of bad loans is not healthy for the banks, which has raised concerns amongst the investors.  

  

FII selling  

FIIs were previously seen to be quite interested in the Indian markets but in recent times, they have turned bearish and started booking profits. Along with them, DIIs have also continued booking profits.  

  

Selling pressure   

Blue chips and the index heavyweights such as RIL and HDFC twins witnessed strong profit booking on Wednesday; thus, further dragging down the Indian equity indices.  

  

Union Budget 2021  

There seems to be nervousness in the markets ahead of the presentation of the Union Budget for 2021 on February 1. It is being seen that the upcoming budget will be a tight rope walk for the government and hence, investors are rushing out to hold a defensive portfolio with adequate cash in hand to jump in when better opportunities will arise.  

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