5 Reasons Why Sensex Crashed Today

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Indian share markets witnessed huge selling pressure today and ended deep in the red.

Benchmark indices registered sharp losses tracking weakness in the international market as the US dollar rose and Covid-19 cases continued to rise, resulting in investors' flight to safety.

At the closing bell, the BSE Sensex stood lower by 871 points (down 1.7%).

Meanwhile, the NSE Nifty ended down by 265 points (down 1.8%).

Tata Steel and Tata Motors were among the top losers today.

SGX Nifty was trading at 14,563, down by 262 points, at the time of writing.

The BSE Mid cap index and the BSE Small cap index ended down by 1.7% and 1.6%, respectively.

On the sectoral front, banking stocks, auto stocks and metal stocks were among the hardest hit.

Asian share markets ended on a negative note today. Both, the Nikkei and the Hang Seng ended lower by 2%.

US stock futures are trading positive today with the Dow Jones Futures trading up by 107 points.

The rupee is trading at 72.57 against the US$.

Gold prices for the latest contract on MCX are trading up by 0.4% at Rs 44,815 per 10 grams.

Speaking of Indian stock markets, the recent volatility in stock markets has added to the worries of investors and traders alike.

The market is certainly overheated but will it crash anytime soon?

If so then when can we expect it? What will be the scale and duration of such a crash?

Vijay Bhambwani answers these questions in his latest video for Fast Profits Daily.

Tune in to know more...

Here are Top 5 Factors Why the Stock Market Were Down Today:

Rising Covid-19 Cases: A sharp rise in Covid-19 cases are posing a serious threat to the economic recovery of the world.

The brunt is felt in India too. India reported 275 new COVID-19 deaths today, the most this year, as a second surge in cases is filling up hospital beds in big states such as Maharashtra.

Infections rose by 47,262 in the past 24 hours, the highest since early November, to a total of 11.7 million, data from the health ministry showed.

Note that India has recorded the most number of cases after the United States and Brazil. Total deaths have shot up to 160,441 in India.

Weak US Economy: Treasury Secretary Janet Yellen said the US economy remains at risk as she fielded lawmakers' questions about possible infrastructure and tax increase plans under consideration.

Geopolitical Concerns: Geopolitical concerns are also influencing the mood of the stock market. As per a Reuters report, North Korea fired two short-range missiles at the weekend, US and South Korean officials said, but Washington played down the first such tests under President Joe Biden and said it was still open to dialogue with Pyongyang.

The test came after North Korea refused to engage with repeated behind-the-scenes US diplomatic overtures by the new administration since mid-February.

Weak Global Cues: Asian stock markets witnessed selling today amid reports of lockdowns in Europe and a potential tax hike in the US.

It was reported that Asian shares hit a two-week low, oil weakened further and the dollar neared four-month highs as coronavirus lockdowns in Europe and potential US tax hikes hit risk appetite, leading to a flight to safety.

Profit Booking: Apart from the above, losses were also seen as share market succumbed to profit-booking.

Most of the profit-booking was seen in the banking sector today with banking stocks such as HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank, and SBI dragging the benchmark index lower.

We will keep you updated on how these factors develop in the coming days and what effect they have on Indian stock markets. Stay tuned!

Speaking of stock markets crash, in a recent edition of Momentum Moves, our ace chartist Brijesh Bhatia warned about a time correction in the Nifty. This is a situation in which the broader market might get stuck in a broad range for many months.

He also correctly stated that bulls are tiring at higher levels.

Traders and investors are now starting to come to terms with the fact that the Indian stock market is overvalued.

Does this mean the market will crash soon?

Have a look at the two charts below, in the order they have been placed.

Near Term Volatility in Sensex Compensated by Long Term Gains

The year-on-year change in the Sensex was hardly predictable but someone who stayed invested multiplied every lakh nearly 14 times.

As per Co-head of Research at Equitymaster, Tanushree Banerjee, 2021 could be one of the best years for individual investors.

In one of her videos, Tanushree discusses the best safe assets for 2021. You can watch the video here: Safest Assets in 2021 are Not What You Think...

In news from the IPO space...

The public issue of causal dining restaurants chain Barbeque Nation Hospitality was subscribed 81% at the time of closing stock market hours today - the first day of bidding.

Market participants have put in bids for 40.5 lakh equity shares against the offer size of 49.9 lakh shares, the subscription data available on exchanges showed.

Retail investors lent support as they put in bids 4.4 times more than their reserved portion.

The part set aside for non-institutional investors was subscribed 4% and that of employees 13%.

The company has fixed a price band of Rs 498-500 per share for its initial share sale.

The initial public offer (IPO) comprises a fresh issue of shares worth Rs 1.8 billion and an offer-for-sale (OFS) of up to 54,57,470 equity shares.

At the upper end of the price band, the IPO is expected to fetch Rs 4.5 billion.

The company has already raised Rs 1.5 billion through a pre-IPO placement from Xponentia Capital and Jubilant Foodworks.

Proceeds from the issue will be utilised to fund the company's capital expenditure for expansion and opening of new restaurants besides, prepayment or repayment of certain borrowings and expenses related to general corporate purposes.

Earlier in 2017, the company had filed IPO papers with markets regulator seeking to raise Rs 7 billion. However, the regulator kept the processing of the company's proposed IPO in abeyance "pending regulatory action for past violations" and finally approved the IPO plan in January 2018.

Although, the company could not launch the initial share-sale due to adverse market conditions.

As of December 2020, Barbeque Nation Hospitality operates 147 outlets across India and six outlets across three countries - UAE, Oman and Malaysia.

Speaking of IPOs, note that four companies - Anupam Rasayan India, Craftsman Automation, Laxmi Organic Industries and Kalyan Jewellers will make their debut this week, in what are back-to-back listings.

Anupam Rasayan listed its equity shares on the bourses today, Craftsman Automation and Laxmi Organic Industries will do so on March 25, and Kalyan Jewellers on March 26.

In the first quarter of 2021, 16 companies launched public issues. Barbeque Nation Hospitality is the 17th public offer in Q1CY21.

With this, the total fund raising in 2021 through primary market, so far, stands at Rs 188 billion.

How the above developments pan out going forward remains to be seen. Meanwhile, we will keep you updated on the latest news from this space.

Moving on to stock specific news...

Adani Green Energy was among the top buzzing stocks today.

Shares of Adani Green Energy touched 52-week high of Rs 1,341 today after the company signed a share purchase agreement for the acquisition of 100% stake in two SPVs.

Adani Green Energy is the first Adani group company to hit Rs 2-trillion market-cap. Shares of the company witnessed huge buying interest this week after Adani Renewable Energy Holding Fifteen (AREHFL), a subsidiary of the company, received Letter of Award (LOA) for 300 MW wind project.

Stay tuned to receive more such company news from this space.

And to know what's moving the Indian stock markets today, check out the most recent share market updates here.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

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