The domestic stock market witnessed a dramatic turn of events on Friday, with benchmark indices sharply declining after an initially positive start.
At 1:56 pm, the S&P BSE Sensex plummeted by 1,010 points to 73,601, while the NSE Nifty50 dropped over 250 points to 22,394.
Earlier in the day, the Nifty50 had reached a new record high, but the momentum quickly reversed.
All Nifty sectoral indices experienced significant declines, particularly in IT, banking, and financial services.
Notably, major blue-chip stocks like Reliance Industries Limited, HDFC Bank, and TCS also contributed to the steep fall on Dalal Street.
What caused this sudden downturn? Experts attribute it to heightened volatility driven by pre-election anxiety and various other factors.
Amit Goel, Co-Founder and Chief Global Strategist at Pace 360, pointed out that market volatility has been on the rise in recent weeks.
He highlighted both global and domestic factors influencing this volatility, including speculation about the timing and scale of the first Fed rate cut of the season, as well as selling pressure from foreign institutional investors (FIIs) in emerging markets.
Additionally, the impending release of Non-Farm Payrolls (NFP) data from the US, expected later in the day, added to market uncertainty.
On the domestic front, factors such as the announcement of Q4 results, nervousness ahead of election outcomes, and a high level of margin trading have contributed significantly to market fluctuations.
The India VIX index, which measures market volatility, has seen a significant increase in recent days, suggesting that volatility could further escalate as the June 4th election results draw nearer.
