Stock Indexes Fall For 2022 Resulting In Global Sell-off; The Sensex Falls 1,021 Points

ByBooster Doze

Sep 23, 2022 Sensex, Stock indexex

Stock indexes Fall for 2022 resulting in global sell-off: Sensex falls 1,021 points.

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Stock indexes falls today and sensex falls 1,021 point at the end of the day

The Indian Market The fall came on a third day amid a global sell-off as investors aligned for a tighter monetary policy regime, even as the rupee’s depreciation threatened to reverse the positive foreign inflows seen since July into the domestic market.

The benchmark Sensex ended the session down 1,021 points or 1.7 per cent at 58,099, and slipped into negative territory in terms of year-on-year returns. This was the biggest fall in the index since September 16 and its lowest level since August 29. The Nifty ended the session at 17,327, down 302 points or 1.7 per cent.

Stock Indexes Today

Stock Indexes Fall For 2022 Resulting In Global Sell-off

Foreign portfolio investors (FPIs) sold shares worth Rs 2,900 crore, taking their three-day selloff to over Rs 5,000 crore. A weak rupee eats away at foreign investors’ returns and impacts incremental inflows.

The Dow Jones Industrial Average was down more than 20 percent from its January 5 intra-day record high on Friday amid concerns that aggressive policy by the Federal Reserve would push the economy into recession. The index was down around 1.9 per cent by 21:30 IST, falling below 30,000 for the first time since June.

Experts said pressure on domestic equities and currency may continue as investors adjust more quickly by global central banks. US Federal Reserve It hiked rates by 75 basis points this week and dropped the base rate estimates.

“It is now expected that US rates will eventually be above 4.5 per cent. Earlier this was not taken care of. In addition, the dollar is strong and it will be difficult for fund managers to allocate large sums of money to emerging companies. Market, There is also a fear that the RBI hike may be faster than the price. RBI has to protect the rupee apart from controlling inflation,” said UR Bhat, founder, Alfaniti Fintech.

10-year US bond yields rose and ended the session at 3.8 per cent, the highest since April 2010. The wide spread between domestic and US bond yields is seen as another headwind for the market.

“India’s 10-year bond yield spread in the US has a largely positive correlation with the Nifty 50’s price-to-earnings (P/E) multiple with very few exceptions. As per the correlation of the last 20 years, the recent fall in the spread could potentially put pressure on the P/E multiple of the Nifty 50 index,” said a note by ICICI Securities. India’s bond yield in the US has hit a 12-year low.

Nifty is currently trading at 19x at 12-month forward P/E, which is higher than the historical average of around 16x.

“Amid sluggish global demand, higher market valuations, slowing retail flows and the lack of a positive catalyst for our earnings projections, we remain cautious on overall market returns in the short term,” BNP Paribas said in a note this week.

Markets remained weak on Friday, with 2,580 shares falling and only 896 shares rising. Barring three, all the constituents of the Sensex closed with losses. Power Grid was the biggest loser at 8 per cent, followed by M&M and SBI with 3-3 per cent fall. HDFC Bank, Reliance Industries and ICICI Bank contributed more than 40 per cent to the Sensex losses. All the 19 sectoral indices of BSE closed with a fall. The BSE IT index outperformed, down 0.8 per cent.