Indian markets crashing?

Indian markets crashed today with Sensex falling 930 points and Nifty50 dropping 309 points. FII outflows, weak earnings and global volatility fuelled the decline, but does this mean a crash?

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Squirrels' Data Intelligence
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Yes, Indian markets experienced a significant downturn today, October 22, 2024. The BSE Sensex plunged by 930 points, closing at 80,220.72, while the Nifty50 dropped by 309 points, ending at 24,472.10. The market saw widespread losses, with major sectors such as banking, real estate, and metals under pressure. Small-cap and mid-cap stocks were hit the hardest, falling 3.71% and 2.52% respectively.

Key reasons behind this crash include heavy selling by foreign institutional investors (FIIs), who have withdrawn significant amounts due to better opportunities in markets like China and Hong Kong. As of October 21, 2024, FIIs had sold Indian equities worth ₹88,244 crores this year. Additionally, weak quarterly earnings from major companies, a rise in U.S. bond yields, and global market corrections further contributed to the bearish sentiment.

Despite these setbacks, domestic institutional investors (DIIs) have been providing some counterbalance by buying into the market, but it hasn’t been enough to prevent today's losses. Analysts expect the volatility to continue in the near term, particularly if corporate earnings remain weak and global economic conditions persist in their current state.

Markets are but deceptive

However, India’s growth story is a global hotspot. These indicators are likely short-term, with little long-term impact on the markets.

India’s growth remains strong, despite global sluggishness. For FY 2023-24, India achieved 8.2% growth, and it is expected to maintain a solid 7.0-7.2% in FY 2024-25. Key drivers include a rebounding rural economy, robust manufacturing, and growing exports. Additionally, India’s consumer spending is shifting toward non-food items like durables, reflecting economic resilience.

Though inflation and global factors are causing short-term market volatility, India's long-term fundamentals remain intact.

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