The BSE Sensex plunged over 700 points and Nifty declined over 200 points.Let me put the reason from both Technical and Fundamental Perceptive
- Liquidity Squeeze by FII’s : FII money is Hot money which chase return irrespective of market. The Hottest Stock market on earth right now is Chinese Stock Market which is running like there is no tomorrow. China’s securities regulator approved 30 new initial public offers (IPOs). FII withdrawing funds for investing in IPO in China. $175 billion of IPOs are lined up this week.
- Spike in Crude Prices: Oil hits 2015 highs jump 50% from 2014 Lows We are net importer of Crude Oil and Jump in crude oil prices will have negative impact on Indian Economy.
- Passage of crucial bills stuck in Parliament: GST and LAND BILL which would have shown Government is committed to reform and stuck in Upper House and patience is running out of investors. MAT issue has also dented the confidence of Global Investors .
2. Technical Reason
- Trading below 200 DMA: Nifty/ Sensex after 15 months are trading well below its 200 DMA, putting pressure on market, as many FII’s have 200 DMA benchmark for buying or selling.
- Gann Date Effect- As discussed in Weekly Analysis and Daily Analysis Gann/Appoint and Gunner plays an important role in finding impulsive move, all studies were pointing towards a big move.
- The fast fall we saw in Opening was was triggered by algorithmic trading platforms, As per Dealers Aberdeen Global has sold 13 Lacs Nifty Futures based on their algo program which lead to 159 points fall in matter of 20 mins.