Benchmark stock market indices witnessed a sharp drop during Wednesday’s trading session, with the S&P BSE Sensex and NSE Nifty 50 witnessing a bloodbath.
The stock market began the day continuing the record-breaking highs, which saw it cross 70000 for the first time ever.
IT and consumer goods stocks saw good numbers and mainly drove the growth.
This changed over the course of the trading day as heavyweight sectoral indices turned the market negative by closing time.
The S&P BSE Sensex plummeted 930.88 points or 1.30 per cent to 70,506.31, while the NSE Nifty 50 settled 302.95 points or 1.41 per cent lower at 21,150.15.
The Nifty 50 saw its worst session in nine months.
New COVID variant, profit bookings by foreign investors
The emergence of a new COVID variant which led to rise in the number of Covid-19 cases in India, the US, UK and other places in Asia, is one factor that is being attributed to the crash.
Heavy profit booking by investors involved in IPOs, due to the record highs hit by the market is what triggered the sharp downturn, many experts believe.
Easy money sentiment buoyed the all-time high numbers and the markets were slated for a correction. Concerns about a potential bubble forming in the smallcap sector were also touted as reasons for the drop.
While not a full-fledged market crash, experts believe investors should hedge their bets and look at the bigger picture.
Focusing on the long-term outlook rather than reacting to short-term fluctuations would be the way to go for now.
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