InvestorQ : Why did the Nifty and the Sensex fall so sharply on 29 November?
Tisha Malhotra made post

Why did the Nifty and the Sensex fall so sharply on 29 November?

Sam Eswaran answered.
3 years ago

Broadly, most of the sectors other than telecom and realty were down on Friday with banks, IT, pharma and metals taking a hit on Friday. The sharp fall in the markets was driven by 3 principal reasons.

Firstly, the GDP expectations were already quite low and traders did not want to remain long on a day when there were chances of the GDP numbers falling sharply. However, the actual GDP at 4.5% is not as bad as the worst fears in the market. But GDP concern was a major factor in the market correction.

Secondly, the global scenario is not too encouraging. With the US passing a resolution condemning China for its action in Hong Kong and also supporting the protesters in Hong Kong, the relations between the two nations have soured quite a bit. Markets were sceptical that this could impact the outcome of the trade deal, which continues to be elusive.

Lastly, there was FPI selling on Friday. Also traders wanted to go into the weekend light instead of carrying heavy positions. That also explained the sharp fall. However, the Nifty and the Sensex have sustained above their psychological levels and that could be the encouraging news for markets.