The Indian stock market ended with significant losses on Thursday, May 22, as rising geopolitical tensions, mounting concerns over US debt and stretched valuations of domestic equities drove investors away from riskier equities.
The Sensex closed 645 points, or 0.79 per cent, down at 80,951.99, while the Nifty 50 closed 204 points, or 0.82 per cent, lower at 24,609.70. The BSE Midcap index fell 0.33 per cent, but the BSE Smallcap index rose 0.17 per cent.
Investors got poorer by about ₹2 lakh crore in a single session as the cumulative market capitalisation of BSE-listed firms dropped to nearly ₹439 lakh crore from ₹441 lakh crore in the previous session.
Indian stock market: 10 key highlights from the day
1. What drove the Indian share market down today?
The market appears concerned about the US debt due to the proposed tax bill and its ripple effect on the global economy. Moreover, stretched valuations, mixed earnings, and a lack of clarity on the US-India trade negotiations are also weighing on market sentiment.
“The key benchmark indices witnessed declines amid US fiscal concerns that the proposed budget bill could significantly increase the national debt, pushing US treasury yields higher due to tepid long-term bond demand. Adding to the pressure, a major credit rating agency’s downgrade of the US credit outlook sparked broad-based selloffs across Asian markets,” Vinod Nair, Head of Research, Geojit Investments, observed.
“Despite a notable improvement in India’s PMI in May and uptick in fiscal scenario, ongoing uncertainty around US-India trade negotiations and persistent global market volatility are likely to keep Indian equities in a consolidation phase in the near term,” Nair said.
(This is a developing story. Please check back for fresh updates.)
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