After four consecutive days of gains, Indian stock markets witnessed heavy profit-booking on October 8. After early gains, both Sensex and Nifty slipped from their highs and fell into the red. Heavy selling was seen in banking, auto, FMCG and realty stocks. In morning trade, the Sensex rose 254 points to 82,180.77, while the Nifty rose 70 points to 25,178.55. However, by the afternoon, profit-taking took over and the stock market lost all its gains. At around 12:35 pm, the Sensex was trading at 81,691.77, down 234.98 points or 0.29%. Nifty was trading at 25,023.10, down 85.20 points or 0.34%. There were four major reasons for today’s fall in the stock market:
1. Pressure to book profits
After four consecutive days of gains, investors started booking profits on Wednesday. Heavy selling was seen in banking, auto, FMCG and realty sectors. Nifty Bank index also broke its six-day high.
2. Weak global signal
Market sentiment remained subdued due to weak signals from foreign stock markets. In Asian markets, Hong Kong’s Hang Seng index fell nearly 1% in morning trading. Meanwhile, US stock markets closed weak on Tuesday, which impacted domestic sentiment.
3. Rise in crude oil prices
Global benchmark Brent crude rose 0.78% to $65.96 a barrel. Rising oil prices have raised concerns about inflation and import costs, making investors cautious.
4. Increase in Volatility Index
India VIX (volatility index) rose 3% to 10.36 on Wednesday, indicating nervousness among stock market investors. An increase in the volatility index indicates that traders are more uncertain about the market, increasing the likelihood of a short-term correction.
What do technical experts say?
Anand James, Chief Market Strategist, Geojit Financial Services, said, “Nifty tested 25,200 levels and as expected, volatility increased. The ‘Hammer Candlestick Pattern’ formed yesterday proved our prediction correct. We expect a sideways or slight decline between 25,030-25,000, unless Nifty recovers strongly above 25,200. Does. “We don’t see any major upside at this point.”