With one pre-election poll in the US predicting the popular vote in favour of Donald Trump, markets across the world recorded their shock and disappointment by ending in the negative on Wednesday. India was no different, with the benchmark Sensex losing nearly 350 points, down 1.25 per cent to close at 27,527, its lowest in over three months. The Nifty lost 112 points to close at 8,514.
Experts believe the market fall were triggered primarily by events in the US. Raghu Kumar, Director, Upstox, said, “The sheer unpredictability of what Mr. Trump would bring to the White House and the uncertainty that would cloud the markets triggered the downfall. Secondly, the US Federal Open Market Committee, which meets monthly and is responsible for deciding key decisions such as the headline lending rate, announced that it is expected to keep rates unchanged today (Wednesday) but that, due to a surge in the US markets, an interest rate hike in December is expected.”
The fall was uniform across the broader markets, indicating there was no domestic trigger. The broader BSE 100 and 200 indices fell about 1.4 per cent each while the BSE Midcap and Smallcap indices both lost 1.84 per cent. Sectorally, pharmaceuticals, media and realty were the worst performers.
Foreign investors sold net equity of Rs 667 crore on Wednesday, while domestic institutions used the opportunity to buy stocks worth Rs 407 crore, net. Retail investors on the BSE bought net equity of Rs 80.61 crore on the BSE.
Jayant Manglik, President, Retail Distribution, Religare Securities Ltd. said in a note: “On the local front too, news was not encouraging as the S&P ruled out India’s rating upgrade till 2017. Feeble opening of European markets further added to the pressure as the session progressed. Needless to say, our markets are currently dancing to global tune and we believe this scenario will continue until next week.”