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Massive profit booking fades historic market surge
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SME Times News Bureau | 23 May, 2019
The BSE Sensex jump-started to cross the 40,000 mark for the first time
ever on Thursday with the ruling NDA leading the Lok Sabha vote count
from early in the day. In an unexpected turn, however, the markets
witnessed a sharp fall in the second half owing to profit booking that
washed away all the early gains.
From the historic peak of
40,124.96, reached within an hour of market opening, the Sensex ended
trade on counting day at 38,811.39, which was over 1,300 points lower
than the highs reached earlier.
With the National Democratic
Alliance (NDA) leading the vote count from the beginning, the markets
saw a massive gap-up opening. The morning gains went up to the magical
figure of 12,000 (Nifty50) but then saw a sudden fall, said Sameet
Chavan, Chief Analyst-Technical and Derivatives, Angel Broking.
"In
fact, the profit taking was so immense, we not only wiped off all gains
but also went on to sneak into well inside negative territory," Chavan
added.
As political uncertainty went out of the picture, the
volatility index or the India 'VIX' dropped by nearly 30 per cent during
the trade session.
The Sensex closed in the red, 298.82 points
lower, or by 0.76 per cent, at 38,811.39. It hit an intra-day high of
40,124.96, and a low of 38,651.61.
The Nifty also declined on
Thursday by 80.85 points, or 0.69 per cent, to 11,657.05 after it had
touched a lifetime high of 12,041.15
Globally, major Asian
markets have closed on a negative note. European indices like FTSE, DAX
and CAC are also trading in the red.
"World shares have fallen
four consecutive days on Thursday as concerns grew that the China-US
trade tiff was fast turning into a technology war between them," said
Deepak Jasani of HDFC Securities.
"Any credit implications of the
outcome of India's general election will be determined by the policies
adopted by the government in the next few years. These policies have yet
to be formulated," US rating multinational Moody's Investors Service
Vice President (Sovereign Risk Group) William Foster said in a
statement.
"At this stage, we expect the broad push towards
fiscal consolidation to remain, although with greater policy emphasis on
supporting low incomes," he said.
"Unlike in 2014, NDA-II has to
deal with a much weaker economy. Rural distress and slowing investment
in the country are two major issues that need to be addressed in an
urgent manner," said Deepthi Mathew, Economist at Geojit Financial
Services. "The developments in the global economy are also not
favourable, especially with regard to the rising crude oil prices. The
low crude oil prices benefited NDA-I in a bigger way," she added.
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
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66.20
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64.50 |
UK Pound
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87.50
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84.65 |
Euro
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78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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