The Indian domestic share markets experienced a third consecutive session of losses, falling by around one and a half percent due to mixed global cues. The Bombay Stock Exchange’s Sensex declined by 897 points, or 1.52 percent, to close at 58,238. Meanwhile, the National Stock Exchange’s Nifty fell by 259 points, or 1.49 percent, to settle at 17,154.
In the broader market at the BSE, the Mid-Cap index lost 1.8 percent and the Small Cap index declined by 2 percent. In the Sensex, only Tech Mahindra gained 6.8 percent, while the remaining 29 companies experienced losses. IndusInd Bank saw a decline of 7.5 percent, followed by SBI Bank which fell by 3.2 percent, and Tata Motors which declined by 3.1 percent.
All sectoral indices at BSE ended in negative territory. The Bankex sector plunged 2.2 percent, the Telecom sector shed 2.1 percent, and the Auto industry slipped two percent. The overall market breadth was negative, with shares of 2,838 companies falling, while shares of 766 companies rose. A total of 153 shares remained unchanged.
The decline in the Indian stock market can be attributed to mixed global cues, including the decline in the US stock market, which saw the S&P 500 fall by 0.5 percent due to concerns about rising inflation and a possible hike in interest rates. Additionally, rising COVID-19 cases in India and uncertainty over the government’s fiscal policies have contributed to the market’s decline.
Investors are also concerned about the impact of rising oil prices on the Indian economy, as the country is heavily dependent on oil imports. The recent surge in oil prices is expected to increase India’s trade deficit and inflation, which could lead to a slowdown in economic growth.
The Reserve Bank of India (RBI) has kept interest rates on hold, despite inflation exceeding its target range, in order to support economic growth. However, the recent decline in the stock market may force the RBI to reconsider its monetary policy stance and hike interest rates to curb inflation.
The Indian government’s recent budget announcement has also raised concerns among investors. The government has proposed an increase in spending on infrastructure and social welfare programs, which could lead to a widening of the fiscal deficit. Additionally, the government’s decision to increase import duties on certain goods could lead to higher inflation and a decline in consumer spending.
Despite the recent decline in the stock market, experts believe that the Indian economy is still on a path of recovery. The country’s GDP is expected to grow by around 10 percent in the current fiscal year, driven by a rebound in consumer spending and a surge in exports. Additionally, the government’s focus on infrastructure development and reforms in the agricultural sector are expected to boost economic growth in the long run.
The Indian stock market has experienced a third consecutive session of losses due to mixed global cues and concerns over rising inflation and the government’s fiscal policies. While the decline in the stock market is a cause for concern, experts believe that the Indian economy is still on a path of recovery and is expected to grow at a robust pace in the coming years.
