Monday Mayhem: Reasons behind Sensex & Nifty fall
On Monday, a huge sell-off was seen in the domestic markets across various sectors such as metal, banks, realty, auto, etc.
The sudden strong wave of profit booking, during the last two hours of the trading session, resulted in Sensex plunging by more than 800 points to close at 38,034.14 levels while Nifty was down by 2.46 per cent to settle at 11,221.70 levels.
During today’s trading session, profit booking was seen in the recent outperformers.
It is believed that the shares of banking and financial companies slipped as a result of market reports based on FinCEN’s leaked documents. The reports suggest a list of banks, including Indian banks, which helped to facilitate transactions red-flagged by the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) for suspected money laundering, terrorism, drug dealing, and financial fraud between 2010 and 2017.
A resurgence in Coronavirus cases in the UK and Europe could result in the re-imposing of lockdown measures in certain regions. Rumours about a second wave of Coronavirus and spike in cases have kept the investors on edge. Additionally, reports suggesting UK’s top banks also being amongst those involved in allegedly illicit funds transfer led to a sharp fall in the European markets. Overall, the global cues remained weak as a sell-off in the US equities was seen on Friday.
Looking at the rich valuations of the market, analysts believed that a healthy correction in the market was due.