Continuation of the Indian stock market's losing spree was witnessed on Monday as the BSE Sensex slumped 169.57 points or 0.21 percent to 81,014.36. It was the fifth successive day of loss for the BSE barometer. The NSE Nifty also extended losses into the fourth session in a row and moved southwards by 54 points or 0.22 percent to 24,798.15.
This extended downturn comes as weaker-than-expected jobs data from the United States stirred fears the world's largest economy could be in for a coming slowdown. Global markets have reacted negatively to the data, with concerns that the US Federal Reserve may struggle to balance interest rate cuts with the need to manage a potential recession.
Rate Cut Dilemma Raises Market Volatility
While the market widely expects a 25-basis-point rate cut from the Fed in the upcoming policy meeting, concern is growing that this will not be enough to keep the US from recession. Stronger signals could be sent about how bad the slowdown in the economy is getting with a more significant cut of 50 basis points, further unnerving investors.
Prashanth Tapse, Senior VP (Research) at Mehta Equities said investor sentiment has turned from euphoria on the US inflation control to fears of economic slowdown. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services cautioned that market volatility can surge in the days to come, indicated by a 12 per cent spurt in the CBOE VIX to 23.50.
Sector-Specific Updates
Some stocks bucked the trend despite the bearish tone across the board. SpiceJet surged 5% to Rs 64.55 following reports promoter Ajay Singh plans to offload more than 10% of his stake in the company to raise funds. Jio Financial Services Ltd gained 0.10% to Rs 337.25 after it said it formed a joint venture with BlackRock Advisors Singapore.
On the losing side, Suzlon Energy was down 1.11 percent at Rs 73.90 following an announcement to acquire a controlling stake in Renom Energy Services. Market analysts say the US CPI will be crucial and might act as an indicator of future expectations of investors.
Inputs by Agencies
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