Why did Indian Market suffer the worst one-day fall in 7 months?
Indian Stock market suffered the worst one-day fall in 7 months on December 21. The Sensex index dropped by 4.34% or by 2,037.61 points to 44,923.08. The broader Nifty benchmark dropped by 4.57% or 629.1 points to close at 13,131.45.
Key Reasons for the worst one-day fall
- The BSE Sensex dropped by 1,407 points to 45,554 while the NSE Nifty50 dropped by 432 points at 13,328.
- The news of the new coronavirus strain in the UK- B.1.1.7 has resulted in doubts among investors globally.
- All the 50 shares of Nifty suffered losses. ONGC, Tata Motors, GAIL, Hindalco, IndusInd Bank, Bharat Petroleum, and Indian Oil closed between 7.21% and 9.53% lower.
- ICICI Bank, Reliance Industries, HDFC, and HDFC Bank saw the biggest losses. All these accounted for a loss of over 500 points in the 30-scrip index.
- Graphite India, SpiceJet, Equitas Holdings, BHEL, Indiabulls Housing Finance, and Tata Power were top losers from broader market space, dropping by 10 percent at the close of the day.
- India VIX spiked sharply by 24.54% from 18.62 to 23.19.
- Airline stocks dropped by 10% after the ban on air travel from London.
Bombay Stock Exchange is an Indian stock exchange established in the year 1875. It is located in Mumbai’s Dalal Street. It is the oldest stock exchange in Asia.
India VIX is a volatility index that is based on the NIFTY Index Option prices. A volatility figure or percentage is calculated from the best bid-ask prices of NIFTY Options contracts. This figure indicates the expected market volatility in the next 30 days.