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Sensex gives up Modi momentum, falls to 2014 levels

By FnF Correspondent | PUBLISHED: 20, Jan 2016, 16:10 pm IST | UPDATED: 21, Jan 2016, 15:07 pm IST

Sensex gives up Modi momentum, falls to 2014 levels New delhi: The Sensex sank nearly 650 points on Wednesday to slip below the psychological 24,000 mark for the first time since May 16, 2014, the day Prime Minister Narendra Modi led the BJP to a big win in the general elections. Today, the rupee too breached the 68 per dollar mark to hit a 29-month low.

Here are the 10 latest developments in this big story:

1) On May 16, 2014, the Sensex had cheered the BJP's win by zooming almost 1,500 points to cross 24,000. In the days that followed, it gained steadily in anticipation of economic reforms and accelerated growth promised by the new government.

2) Twenty months later, the Sensex today erased all gains since that day. The widely tracked blue-chip index has fallen in sync with global stocks that have tumbled on account of falling crude oil prices and the slowdown in China.

3) There's also disappointment with the Modi government's tenure so far, traders say. Corporate earnings and domestic demand have remained sluggish, belying expectations of faster economic growth under PM Modi, said Sanjiv Bhasin, executive vice president of India Infoline
 
4) He also told NDTV that the carnage in the markets reflects the disappointment of foreign investors over slow pace of economic reforms. "There was a consensus overweight on India, which is now getting corrected," he said.

5) The Modi government has opened up several sectors for foreign investment, but it has failed to get crucial reform measures like the Goods and Services Tax (GST) Bill and the Land Acquisition Bill, passed in Parliament.
 
6) The delay in economic reforms and high volatility in global markets have led foreign investors to turn net sellers of domestic equities. Foreign investors have sold a net around $847 million worth debt and equities so far this month, a third straight month of outflows.

7) The slide in the rupee has also hurt sentiments, traders say. The rupee on Wednesday breached 68 per dollar mark for the first time since September 4, 2013. Fears of a global currency war, following China's devaluation of its yuan currency in August 2015, have been weighing on the rupee.

Commenting on the rupee’s fall, Power Minister Piyush Goel said the Indian currency is still holding strong. Other currencies have depreciated more, he added.
 
8) 2016 has begun disastrously for domestic markets, with the Sensex correcting by over 2,000 points or 8 per cent in just three weeks.  The Sensex is off 6,000 points or 20 per cent since hitting a record high in March 2015. That means technically the Indian market is in bear territory.

9) Among global factors, the crash in crude prices has been cited as one of the biggest reason for the crack in markets. Though India benefits from lower oil prices, falling crude prices have raised concerns about global growth and hurt equities. Crude prices hit new 12-year lows below $28 a barrel on Wednesday.
 
10) Concerns about a hard landing in China, where annual growth hit a 25-year low, have also hit global sentiments. China isn't buying as many commodities as it once did, hurting exporters in many countries including India.

Markets closed with deep losses, albeit off the day's low; the Sensex ended 418 points or 1.7 per cent lower at 24,062, while the Nifty closed 126 points down at 7,309.