Indian Markets Tumble: Sensex Down 400+, Nifty Under 25,000 Ahead of Jackson Hole Meet

Stock market news India: Indian equity markets reversed direction on Friday after hovering in the green for the better part of the last week on account of profit booking and nervousness ahead of US Fed Chair Jerome Powell’s highly awaited address at the Powell Jackson Hole speech.

The Sensex falls 400 points (0.64%) to 81,474.22 while the Nifty below 25000 (0.68%) to 24,913.30 at 10:30 a.m., breaking the six-session winning streak.

There was broad-based selling across sectors with only pharma and consumer durables remaining in the green. Financials, IT and heavyweight stocks witnessed the maximum pressure. Top laggards include Hero MotoCorp, HCL Technologies, HDFC Bank, Grasim Industries and Asian Paints, which all fell as much as 2 percent intraday.

Reasons behind the Indian stock market fall:

1) Profit-booking after six-day rally:

The market ended a six-session winning streak as traders booked profits. Stocks across frontline banking and IT such as HDFC and ICICI Bank witnessed selling. The Nifty market update had rallied for the past six sessions after a sharp sell-off on GST rollout concerns last week. The recent rally was aided by hopes of a GST shake-up and an upgrade in S&P sovereign rating, which have prompted some profit booking.

2) Traders cautious ahead of Powell’s speech:

Market participants are now awaiting Powell’s speech at Jackson Hole, which is expected to offer some clarity on the Fed’s monetary policy in September. “Market weakness was the result of the rising uncertainty ahead of Powell’s speech, which may determine the way forward for monetary policy,” said Devarsh Vakil, Head, Prime Research at HDFC Securities.

3) Slight increase in volatility (India VIX):

Market’s barometer of volatility, India VIX, was up nearly 2 percent to 11.59. Higher volatility typically indicates an increase in risk aversion and traders prefer to lighten their positions.

4) Anticipation ahead of US tariffs:

Stock markets were also cautious of the 25% US tariffs which are set to kick-in on August 27. Markets are also wary of India possibly reciprocating with tariffs on US imports, which according to analysts could dent India’s growth.