Indian markets plunged on November 28, 2024, as Sensex fell over 1000 points and Nifty50 dropped below 24,000, influenced by IT corrections and economic concerns.
Thursday, November 28, 2024, was a challenging trading day for Indian stock markets. The Sensex plummeted by over 1000 points, while the Nifty50 breached its psychological level of 24,000, closing 361 points lower. This sharp correction marked a significant setback for frontline indices, which had shown resilience earlier in the week.
F&O Expiry Triggers a Market Slide
The volatility coincided with the November series Futures & Options (F&O) expiry, a day that typically witnesses heightened activity. Markets, which had remained range-bound after recovering from lower levels, faced significant selling pressure as traders squared off positions.
Key Factors Behind the Market Correction
- IT Stocks Undergo Correction
The Nifty IT index, which had been a top performer in November, delivering over 7% returns, saw a decline of 2.4% on Thursday. After such a strong rally, a correction in IT stocks was expected as profit-booking set in. Despite the fall, the IT index remains a relatively stable segment in turbulent times, reflecting its defensive nature.
- RBI’s Stance on Rate Cuts
The Reserve Bank of India (RBI) is expected to maintain its pause on interest rate cuts in December, citing inflationary pressures. October’s inflation surged to a 14-month high of 6.21%, driven by rising vegetable and edible oil prices. With inflation nearing the upper tolerance band, the RBI may delay further monetary easing, impacting market sentiment.
- India VIX Spikes
Market volatility, as measured by the India VIX, surged by nearly 4% on Thursday, surpassing the 15-mark. This increase suggests heightened nervousness among market participants, further contributing to the bearish sentiment.
- Declining Earnings Growth
A key concern for the markets has been the declining earnings growth trajectory. With no clear indicators of a robust recovery in corporate earnings for the next quarter, investors remain cautious. Additionally, the government’s reduced capital expenditure (CAPEX) has dampened hopes of a strong economic revival.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
