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Indian Stock Markets Witness Sell-Off; UN Cuts GDP Growth Forecast; US Economy Expands


On Friday, the Indian stock markets witnessed a massive sell-off, with the BSE Sensex tanking 874.16 points or 1.45 per cent, its biggest single day slide in more than a month, to settle at 59,330.90. The broader NSE Nifty fell 287.60 points or 1.61 percent to close at 17,604.35.[0]

Foreign Institutional Investors (FIIs) were net sellers in the capital market on Tuesday, offloading shares worth Rs 760.51 crore, according to exchange data.[1] FIIs have been on a selling spree this month, taking the total outflow in equities to Rs 16,766 crore so far in January, as per NSDL data.[2]

Due to the influence of restrictive monetary policy and lack of international demand, the United Nations has decreased its outlook for India’s GDP growth in 2023 to 5.8%.[2]

In the fourth quarter of 2018, the US economy grew at an annual rate of 2.9 percent, surpassing expectations.[2] It appears that the United States Federal Reserve might maintain its hawkish attitude for an extended length of time.[2]

At the start of trading, the 30-share BSE index plummeted 578.19 points to 59,626.87.[3] For the third day in a row, stocks of banks have gone down.[4] Both Bank of Baroda and State Bank of India experienced major falls, with losses of at least 5% each.[5] Meanwhile, the Rupee closed at 81.72 versus the US dollar.[6]

Among the major laggards in the Sensex pack were ICICI Bank, HDFC, Axis Bank, State Bank of India, Reliance Industries, Kotak Mahindra Bank and HDFC Bank.[3] Tata Motors, which returned to profitability in the third quarter of FY23, rose the most by 6.34 per cent.[7]

The Adani group’s stocks dropped drastically, reaching a low of 20 percent, after Hindenburg Research, an American investment research organization, made damning claims.[3]

In other parts of Asia, stock markets in Seoul, Tokyo, and Shanghai were performing positively, whereas Hong Kong was slightly lower.[3]

If Street forecasts are not fulfilled, the market may experience a decline.[2] Attention will be paid to the fiscal deficit figure for FY24.[2] Morgan Stanley, an international brokerage firm, anticipates that the fiscal deficit in FY24 will amount to 5.9% of GDP, compared to 6.4% in FY23.[2]

0. “Opening Bell: Indices open lower; Sensex falls 237 points, Nifty around 17800” Free Press Journal, 27 Jan. 2023, https://www.freepressjournal.in/business/opening-bell-indices-open-lower-sensex-falls-237-points-nifty-around-17800

1. “Sensex, Nifty tank 1% on selling in financial, oil, IT shares” BusinessLine, 25 Jan. 2023, https://www.thehindubusinessline.com/markets/sensex-nifty-tank-1-on-selling-in-financial-oil-it-shares/article66432061.ece

2. “Sensex Crashes Over 1,000pts, Rs 8.1L cr Investor Wealth Lost; Why is Market Falling Today?” News18, 27 Jan. 2023, https://www.news18.com/business/markets/sensex-crashes-over-1000pts-rs-8-1l-cr-investor-wealth-lost-why-is-market-falling-today-6928819.html

3. “Bloodbath on D-Street; Hindenburg report on Adani sinks markets” Rediff.com, 27 Jan. 2023, https://www.rediff.com/business/report/bloodbath-on-d-street-hindenburg-report-sinks-markets/20230127.htm

4. “Markets extend losses, Sensex falls below 59,800 in morning trade” Rising Kashmir, 27 Jan. 2023, http://risingkashmir.com/markets-extend-losses-sensex-falls-below-59800-in-morning-trade

5. “Adani Contagion Fear Hits India Bank Stocks, Major Life Insurer” Bloomberg, 27 Jan. 2023, https://www.bloomberg.com/news/articles/2023-01-27/adani-contagion-fear-hits-india-bank-stocks-major-life-insurer

6. “Business News | Erasing Early Gains, Indian Stocks Close Largely Steady” LatestLY, 24 Jan. 2023, https://www.latestly.com/agency-news/business-news-erasing-early-gains-indian-stocks-close-largely-steady-4752427.html

7. “Nifty slips below 18050, Sensex sheds 200 pts in early trade on Wednesday Jan 25; Tata Motors, Maruti shares rise” The Financial Express, 25 Jan. 2023, https://www.financialexpress.com/market/nifty-slips-below-18050-sensex-sheds-200-pts-in-early-trade-on-wednesday-jan-25-tata-motors-maruti-shares-rise/2959508

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