4 Reasons Why Sensex Fell 388 Points Today

Tue, 12 Apr Closing

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   10:30 am   

Indian share markets witnessed negative trading activity throughout the day today and ended lower.

Benchmark indices fell for the second straight day as inflation concerns lingered and bond yields spiked.

At the closing bell, the BSE Sensex stood lower by 388 points, down 0.7%. Meanwhile, the NSE Nifty fell 145 points.

Axis Bank and Kotak Bank were among the top gainers today. Tata Steel and Tech Mahindra, on the other hand, were among the top losers today.

The SGX Nifty was trading at 17,570, down by 154 points, at the time of writing.

Both, the BSE Midcap index and the BSE Smallcap index ended lower by 1.5%.

Barring banking sector, all sectoral indices ended in red. Metal stocks, realty stocks and energy stocks were among the hardest hit.

Shares of Raymond and Adani Green Energy hit their respective 52-week highs today.

Asian share markets ended on a negative note today. The Nikkei ended lower by 1.8% while the Hang Seng gained 0.5%.

US stock futures are trading in red indicating a negative opening for Wall Street indices with the Dow Futures trading down by 25 points.

The rupee is trading at 76.11 against the US$.

Gold prices for the latest contract on MCX are trading up by 0.6% at Rs 52,510 per 10 grams.

Gold edged higher as appetite for risk weakened ahead of US inflation data that could support the Federal Reserve's aggressive policy stance to contain rising pricing pressures.

Here are four reasons why Sensex fell in the past two days:

Covid cases surge in China: The Chinese city of Shanghai continues to report record coronavirus cases since the pandemic began. The city reported over 26,000 cases on Sunday, despite being under lockdown.

Meanwhile, the US State Department has also ordered all non-emergency government staff and their family members in Shanghai to leave amid the Covid surge.

New variant: If rising cases were not enough, a new variant has emerged and is adding to the worries. Japan reported its first case of omicron XE, a new Covid-19 strain first detected in the UK.

Inflation worries: Market participants avoided fresh positions ahead of the inflation data for both India and the US, which is scheduled to be released later today.

Rising bond yields: Long-term US Treasury yields jumped to a three-year high, fueling a global rise in borrowing costs. Ten-year US yields climbed through 2.75% yesterday, for the first time since March 2019, as investors priced in the impact of the Federal Reserve's tightening plan and accelerating inflation.

We will keep you updated on the latest developments from this space. Stay tuned.

In news from the telecom sector, the Department of Telecommunications (DoT) has invited expression of interest from various stakeholders for partnerships to build 5G use-case ecosystems focused on users and industry needs.

To expedite the development of use cases for the industry, the DoT said it would facilitate necessary approvals, regulatory clearances to enable use case prototyping, pilots, demos, trials at the user or vertical industry premises.

As a part of this partnership, the respective ministries will have to identify a single point of contact within their department for collaborations with other players in the ecosystem, facilitate access to the relevant premises, campuses and ensure the use of necessary infrastructure and data for testing 5G.

The technology stakeholders, which agree to be a part of the partnership will work to develop and deploy prototypes and pilots for 5G use cases as per the needs of the respective ministries or industry verticals.

In other news, telecom stocks were in focus today after the Telecom Regulatory Authority of India (Trai) slashed spectrum auction price of 5G airwaves in the 3300-3670 MHz band by around 36%.

This news had no positive impact on stocks as they fell in early trade, with experts saying that the regulator's fresh prices for existing bands are still too steep.

At the closing bell, Reliance Industries, the parent of telecom market leader Reliance Jio, was down 1.9%, while Bharti Airtel and Vodafone Idea fell over 2%.

Moving on to news from the automobile sector, Tata Motors today reported a 2% year-on-year (YoY) growth in global wholesales, including Jaguar land Rover (JLR), at 3,34,884 units in the March quarter of fiscal 2022.

Global wholesales of all Tata Motors' commercial vehicles and Tata Daewoo range in the quarter under review were at 1,22,147 units, higher by 12% over the same quarter of the earlier fiscal.

For all passenger vehicles, global wholesales declined 4% at 212,737 units in the March quarter.

Global wholesales for Jaguar Land Rover were 89,148 vehicles, including 12,622 units delivered by CJLR.

CJLR is a joint venture between JLR and Chery Automobiles, which is an unconsolidated subsidiary for JLR.

Tata Motors share price ended the day down by 3.1%.

To know more, check out Tata Motors' latest quarterly result and its financial factsheet.

Speaking of the Tata group company, we record a video on our YouTube Channel discussing whether Tata Motors will overtake Maruti in 2022.

You can watch the video here: Will TATA Motors overtake Maruti in 2022.

Meanwhile, Chartist Brijesh Bhatia recently recorded a video on auto stocks, explaining why you should avoid trading in them in April.

Tune in to the below video for more details:

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

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