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The Indian stock market, which has been in decline since April, is now just 1,700 points away from the grip of recession. Experts believe that it may go into recession by the end of this month. A market is considered to be in a bearish phase when it declines by 20 per cent. The Bombay Stock Exchange (BSE) is currently trading around 11,000 or 18 per cent lower than its high of 62,200. In such a situation, if it falls further by 2 percent or goes below 50,000, it can fall further by getting trapped in the bearish. NSE has also fallen from 18 thousand to 15,291.
US market also hit
America’s Nasdaq is in the grip of recession. It has fallen by more than 20 percent. S&P 500, Nifty Bank, BSE Midcap have also been caught in the bearish grip. Excluding the bank in the financial index, 228 out of 380 stocks have fallen 20 per cent.
Foreign investors pulled out 2 lakh crore
(Figures in crores Source- NSDL)
The decline in the Sensex stopped for six days
The decline in the domestic stock markets for the last six days stopped on Monday amid a rise in European markets. Sensex closed at 51,597.84, up 237.42 points. Nifty also closed at 15,350.15 with a gain of 56.65 points. Among the Sensex companies, shares of Hindustan Unilever, HDFC, Wipro, UltraTech Cement, HDFC Bank were gainers.
Fall in these major stocks
Out of the total stocks listed on BSE, 88 per cent of the stocks have gone into bearish phase. That is, they have fallen by more than 20 percent from the high level of one year. Stocks considered to be market-weight have broken down heavily from their one-year levels.
Tech Mahindra has lost 47%, Wipro, 43%, Tata Steel 41%, IndusInd, Infosys 29% and HDFC Bank 27%. Puneet Patni, Head of Research, Swastika Investmart said, “This is the best time for long term investments.
The reason for the fall in the market is the increase in interest rates and selling by foreign investors. The market will rise only after the return of investors. -S Naren, ICICI Prudential