The benchmark BSE Sensex and the Nifty cut down sharply on Monday, 12th September, 2016, tracking a global selloff in risk effects. The Sensex go down 550 points or nearly 2% to 28,251 at day’s low, while the Nifty50 index failed nearly 170 points to 8,699.
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Reasons for Market Selloff Today:
Monday’s market selloff is the biggest since June 24, when national equities cut down sharply.
The global selloff in risk assets today was triggered by talk that the Federal Reserve might be serious about lifting US interest rates as early as next week.
An interest rate hike in the US would make financing in emerging markets like India less attractive for foreign investors.
The current sharp rally and high valuations are likely to add to selling pressure. Both the Sensex and Nifty are trading near best highs.
Sanjeev Bhasin of IIFL said, “We feel the correction in September can be sharper than most expect… The Nifty has rallied almost non-stop from 7,940 on June 25 to near 9,000 on September 8, returning over 13%.”
Market Analysts, Anil Manghnani said that, 8,600 is a solid support level for Nifty and if this level is broken, the selling pressure could accelerate. 8,600 is a major test and support level for Nifty.
At 10:23 a.m., the Sensex had cut some losses and was down nearly 400 points while Nifty traded around 8,750.
Traders continued on sidelines ahead of the Index of Industrial Production (IIP) data to be released on Monday after market hours.
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