Days after Fitch Ratings plunged and broke the top-tier sovereign credit grade of the United States, Sensex of the Dalal Street came trembling after.
The United States stock market suffered a great blow after Fitch ratings stripped it of its top-tier sovereign credit grade from AAA to AA+.
Credit points of the Stock
United States
The US Government’s credit rating has plunged, which led to concerns over the country’s state of finances and its debt burden.
One of the major independent agencies that assess creditworthiness of the United States stocks, the Fitch, put the ratings to a lower level at AA+ from the top level of AAA.
Slow and steady deterioration in the governance over the last 20 years.
India
Dalal Street witnessed Sensex falling over 1000 points just to slip below the 66000 points. On the other hand, Nifty also lost more than a percent to fall below the 19,450-level.
Dalal Street has witnessed constant bloodbaths this financial year.
Trade Indices
All the stock market companies were trading in the red digits with disappointing measures. Top worst hits of the indices were the banking companies and the metal stocks.
Companies like Tata Steel, Tata Motors, Hero Moto, Eicher Motors and Coal India all were trading over 2% lower than the price earlier, while index heavyweights Reliance Industries Ltd and HDFC Bank lost approximately 1.5% each. Fear was too much intensified in Dalal Street as the volatility indicator India VIX rose to 13%.
Among the top worst hits were the Small-and-midcap indices.
Global Markets
Indian markets are following weak overnight units from the Wall Street of the United States with Nasdaq ending 0.43% lower and the Dow Jones’ 0.33% cut. Asia stocks fell after the Fitch Ratings downgraded the United States top-tier credit sovereign rating, during the day.
Japan’s Nikkei and China’s Hang Seng too were trading 2% lower as investors are awaiting the reaction of the US market later in the day.
A trend of recessions is being witnessed in the global stock markets from past Quarters. Everyone has their eyes and indices over the US NASDAQ.
Exhaustion by the FII’s
Foreign Institutional Investors sold Indian stocks worth Rs 93 crore in the last final session after FIIs pumped out Rs 1.5 lakh crore on Dalal Street in Financial Year 24.
Sudden profit rise
July was the 5th consecutive month in which Nifty ended on a very positive note. The market is rallying over by 14% in the last five months. This gave impatient investors the wrong notion of a chance to hop in for some profits. The investors seeing the sudden rallying trend took all the chances and this in turn increased the demand of the indices on the stock which led to its prices decrease, followed by gradual plunging which has become constant for this period.
Top Losers
The top losers of the Sensex in the intra day trading were the National Aluminum Company at 3%, Tata Steel at 2.6%, and Jindal Stainless at 2.6%. National Aluminum and Jindal Stainless companies hit their 52-weeks high this week.
The metal prices in India witnessed a fall after the same was witnessed on the London Metal Exchange (LME).
Future Mark
The stock index is likely to remain range bound between 19,500-20,000 mark for the upcoming week. The support is seen at point 19,561 while the hurdle point is at 19,887 mark.
