Stock Market U-Turn: The stock market had a rough start to business this morning, but the whole picture changed in no time. As soon as the market opened in the morning, sales were seen everywhere. The situation was such that Sensex broke more than 600 points within a short time. The Nifty also slipped below 22,400. However, after this massive decline, buying suddenly returned to lower levels. The market took such a spectacular U-turn that the Sensex rallied 800 points from its day’s low. Nifty also made a strong comeback and crossed the 22,650 level. Shares of pharma companies played the most important role in controlling the market today.

Chaos was seen as soon as the market opened in the morning.

As the market opened this morning, weak signals from Asian markets had a direct impact on the Indian market. Selling pressure was so intense in early trade that the Sensex fell 411.67 points (0.56%) to 72,712.16 at 9:33 am. At the same time, the Nifty slipped 146.95 points (0.65%) to trade at 22,453.05.

In a few minutes the fall deepened. The Sensex fell 609.26 points to hit a low of 72,514.57 intra-day. The Nifty also fell by 212.65 points to 22,387.35. Along with large companies, small and mid-cap stocks also underperformed. The Nifty Midcap 100 and Nifty Smallcap 100 indices fell by more than half a percent. In this initial collapse, the total market cap of companies listed on the BSE was Rs. 3.70 lakh crore has decreased. In simple words, as soon as the market opens, investors will get Rs. Assets worth more than 3.70 lakh crores were destroyed.

These were the main reasons behind the initial decline

There were several global and local reasons behind this disintegration of the market in the morning. The biggest shock came from the IT sector, which saw a massive decline of 2.3%. Shares of country’s leading IT company Infosys fell by 3.4%. In fact, Infosys cut its annual revenue growth estimates due to weakness in the North American market. The company’s decision overshadowed its better-than-expected earnings.

On the other hand, the US Federal Reserve’s decision on interest rates is due this week. Panic was also seen in the minds of investors regarding this. The ‘India VIX’, an index measuring market fear, rose 4.81% to 17.67. The rise of India Wix means that the market is likely to experience major ups and downs in a short period of time. Apart from this, the Asian markets also witnessed a sell-off. South Korea’s Kospi fell 1%. Japan’s Nikkei 225, Indonesia’s Jakarta Composite and Singapore’s Straits Times slipped around half a percent. China’s Shanghai Composite was also in the red. Only Hong Kong’s Hang Seng was up half a percent, while Thailand’s Sate Composite was up just under half a percent.

Market movement changed due to these 3 reasons

After a sharp decline in the morning, the mood of the market suddenly changed around 9:53. There are three major factors at work in pulling the market up from the lows.

1. The first reason was ‘value buying’. The market saw a sharp decline last week, leaving shares of many good companies very cheap. Investors started buying heavily in these cheap stocks when the market fell further today. A rise in shares of the pharma sector also provided strong support to the market.
2. Another major relief has come from crude oil prices. Brent crude futures fell from a six-month high of $117 a barrel. Indian markets have softened after the close on Friday and are trading around $114 to $114.5 per barrel. However, there are still concerns over oil supplies due to continued attacks on Saudi Arabia by Yemen’s Houthi rebels.
3. The third and important reason was the purchase by foreign institutional investors (FIIs). According to exchange data, foreign investors in the Indian market on Friday bought Rs. 887.65 crore shares were bought. This figure also helped boost investor confidence and the market made a spectacular comeback.