6 Reasons Why Sensex Plunged 1,158 Points Today

Thu, 12 May Closing

   Previous Close   

   Pre-Open   

   10:30 am   

Indian share markets remained in a bear grip for the fifth straight session today while the rupee hit an all-time low.

Benchmark indices extended losses amid a broader decline in equity markets following US consumer price data.

At the closing bell, the BSE Sensex plummeted 1,158 points, ending 2.14% lower.

Meanwhile, the NSE Nifty was down 359 points, ending at 15,808.

Wipro and HCL Technologies were among the top gainers today.

IndusInd Bank, Tata Steel, and Bajaj Finance were among the top losers today.

The broader markets ended deep in red as the BSE Mid Cap index slipped 2.2% while the BSE Small Cap index plunged 2%.

All sectoral indices ended in the red with stocks in capital goods sector, auto sector, and banking sector witnessing most of the selling.

The SGX Nifty was trading 2.2% lower at the time of writing.

The rupee is trading at 77.42 against the US$.

Gold prices are currently trading down by 0.2% at Rs 50,741 per 10 grams while silver is also down 1% at Rs 60,165 per kg.

Here are six factors why markets plunged today:

Weak global cues: Asian share markets ended deep in the red today after an overnight drop on Wall Street as investors fret over inflation and looming recession.

At the close in Tokyo, the Nikkei 225 declined 1.8%, while the Hang Seng plunged 2.2%. The shanghai composite dropped marginally by 0.1%.

US inflation data: The US consumer price index (CPI) rose slightly in Apr 2022, up 0.3%, still hovering near the hottest figure in over 40 years. This data doesn't contribute majorly to easing investor worries about future interest rate hikes, weighing on economic growth.

China's continued lockdown: Dozens of mainland Chinese cities, including the financial hub of Shanghai, have been locked down as authorities work to stamp out the coronavirus. For industries ranging from Big Tech to consumer goods, that's destroying both supply and demand.

Global growth concerns: Morgan Stanley has lowered its forecasts for India's economic growth in the next two fiscal years, saying a global slowdown, surging oil prices and weak domestic demand would take a toll on Asia's third-largest economy.

Indian inflation data: The statistics ministry is scheduled to release Consumer Price Index (CPI) data for April at 5:30 PM on today.

In a statement on 4 May, Reserve Bank of India Governor Shaktikanta Das said retail inflation for April is 'expected to be elevated,' having hit a 17-month high of 6.95% in March.

Sectoral check: All sectoral indices ended deep in the red. Banking stocks were the worst hit as the inflation data indicates future interest rate hikes.

The CPI data would indicate RBI's course of action during the June Monetary Policy Meeting. It has been mandated to keep retail inflation in the range of 2-6%.

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

Speaking of stock markets, Chartist Brijesh Bhatia talks about the life insurance sector, in his latest video for Fast Profits Daily.

Brijesh is bearish on the sector and in the below video, he explains why. Tune in to find out more:

In latest developments from the IPO space, Supreme Court has refused to interfere in the on-going IPO process of LIC and rejected interim relief.

While declining to grant interim relief, the bench said:

• The IPO is ongoing and it is a matter wherein large investments have already been made, the bench observed during the hearing.
  
  It would not be appropriate for the court to interfere in a matter of this nature at such a juncture.

The petitioners before the court were aggrieved by the government's decision to trade 5% of its holding in LIC through the IPO.

The petitioners seeking a halt on the IPO process came before the Supreme Court after their respective petitions were rejected by Madras and Bombay High Courts.

The apex court, however, issued notice on the petitions that challenge the passage of Finance Act, 2021 as a money bill.

It was the Finance Act of 2021 and the amendments to the LIC Act made accordingly that facilitated the ongoing IPO.

The court said that the question of passage of Finance Act 2021 as money bill and amendments to LIC Act is a question 'that needs further reconsideration'.

Speaking of the insurance sector, have a look at the chart below which shows the investment assets of non-life insurers and life insurers over the past 10 years:

Investment Assets of Non-Life Insurers 11x That of Life Insurers

As per Tanushree Banerjee, Co-Head of Research at Equitymaster, the above chart is enough proof of how big an earning opportunity is the zero-cost float to the non-life insurers. Their investment assets under management is nearly 11 times that of life insurers.

Moving on to news from the energy sector, Stressed Power plants get a helping hand from the government.

The government has directed state-run Power Finance Corp. (PFC) and REC Ltd to offer short-term loans to stressed power plants using imported coal to help them restart production.

The move comes as an effort to tackle a power crisis that has triggered widespread blackouts and threatens to hurt economic growth.

Separately, the coal ministry may regulate fuel supply to states whose discoms continue to buy cheaper electricity from domestic coal-fuelled plants despite agreeing to buy power from imported coal-fired plants.

Rising global fuel prices have made electricity from plants that rely on imported coal more expensive, crimping demand from the country's struggling power distribution companies.

According to data from the Central Electricity Authority (CEA), the 173 power plants that it tracks have coal stock close to only around a third of the required stock.

A total of 85 power plants fuelled by domestic coal had less than a fourth of their prescribed fuel stock and were at a critical level.

Stay tuned for more developments from this space.

And to know what's moving the Indian stock markets today, check out the most recent share market updates here.

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

Read the latest Market Commentary

Top Gainers TodayTop Gainers over 1-WeekTop Gainers over 1-MonthTop Gainers over 1-YearTop Gainers over 3-YrsTop Gainers over 5-YrsTop Losers TodayTop Losers over 1-WeekTop Losers over 1-MonthTop Losers over 1-YearTop Losers over 3-YrsTop Losers over 5-YrsOnly BuyersOnly SellersMost Active StocksMost Popular Stocks52 Week High Stocks52 Week Low Stocks

INDICESBSE (Rs 0 to 1)BSE (Rs 1 to 2)BSE (Rs 2 to 4)BSE (Rs 4 to 10)BSE (Rs 10 to 20)BSE (Above Rs 20)BSE - AllBSE-30BSE-100BSE-200BSE-500BSE AutoBSE BankexBSE Capital GoodsBSE Consumer DurablesBSE FMCGBSE HealthcareBSE ITBSE MetalBSE Oil & GasBSE PSUBSE TeckBSE RealtyBSE PowerBSE A GroupBSE B GroupBSE Mid-CapBSE Small-CapBSE Basic MaterialsBSE Consumer DiscretionaryBSE IndustrialsBSE UtilitiesBSE Sensex 50BSE Sensex Next 50BSE Bharat 22BSE 150 MidCapBSE 250 SmallCapBSE 250 LargeMidCapBSE 400 MidSmallCapBSE AllCapBSE LargeCapBSE SmallCap SelectBSE 100 LargeCap TMCBSE InfraBSE ManufacturingBSE CPSEBSE Private BankBSE Diversified FinancialsBSE MomentumBSE Low VolatilityBSE QualityBSE Enhanced ValueBSE Divident StabilityS&P BSE IPOBSE SMEIPOBSE 100 ESGBSE CarbonexBSE GreenexNSE (Rs 0 to 10)NSE (Rs 10 to 20)NSE (Above Rs 20)NSE - AllNSE-50NSE ITNSE Nifty Midcap 50NSE JR. NiftyNSE Bank NiftyNIFTY Next 50NIFTY 100NIFTY 200NIFTY 500NIFTY MidCap 100NIFTY SmallCap 250NIFTY SmallCap 50NIFTY SmallCap 100NIFTY LargeMidCap 250NIFTY MidSmallCap 400NIFTY AutoNIFTY Consumer DurablesNIFTY FinanceNIFTY FMCGNIFTY MediaNIFTY MetalNIFTY PharmaNIFTY Private BankNIFTY PSU BankNIFTY RealtyNIFTY Oil & GasNIFTY SME EmergeNIFTY CommoditiesNIFTY CPSENIFTY EnergyNIFTY India ConsumptionNIFTY InfraNIFTY MNCNIFTY PSENIFTY Serv SectorNIFTY100 Liquid 15NIFTY Midcap Liquid 15NIFTY Midcap 150 Quality 50NIFTY50 Equal WeightNIFTY100 Equal WeightNIFTY100 Low Volatility 30NIFTY100 Alpha 30NIFTY Alpha 50NIFTY Dividend Opportunities 50NIFTY High Beta 50NIFTY Low Volatility 50NIFTY200 Quality 30NIFTY 500 Value 50NIFTY 100 Quality 30SECTORSAgricultureAirlinesAluminiumAsset Management CompaniesAutomobilesAuto AncillariesBanks (Private)Banks (PSU)BankingCementChemicalsDefenceDiagnosticsDronesEngineeringElectric VehicleElectric Vehicle BatteryEnergy SourcesESGEthanolFertilizersFintechFMCGFoodGreen HydrogenHotelsInfrastructureInsuranceInvestment and FinanceInvITIT (Large)IT (Others)LogisticsMediaMetalMiningIndia's Big Tech StocksIndian PharmaMNC PharmaPSUPaintPaperPlasticPowerRating AgenciesReal EstateREITsRenewable EnergyRetailingSemiconductorShippingSteelSugarSupply ChainTelecomTextilesTravel Support Services

10 results 25 results 50 results 100 results All results

Indian Share Market Update: Top Gainers and Losers