Indian markets crashed today on behalf weakness seen in global markets. The slump in markets was already expected, but the magnitude of fall has amazed the analyst’s fraternity. Nifty fell by 251 points, down by 3% and closed at 8127. The overall breadth of the market is negative, but some specific stocks could see a recovery in the second half.
– The markets have fallen because of the sudden decline in global crude oil prices and the threat of the Greece dropping EURO zone (Those countries which uses Euro as their currency). The too much decline in crude will result in deflation, a phenomenon where things become cheap and producers do not get in because of the threat of low prices.
– Paints, Plastic and automotive lubricant industry went up crude is used as raw materials in order to produce the products. Tyre and rubber industry too will get benefit out of low crude prices. Indian OMCs went down because of the fall in crude. HUL went up as one of the foreign brokerage agencies has given a “buy” call with revised target from “hold”. Pharma, IT and Banks declined.
Global & Commodity:
-Crude oil prices went down and are expected to trade further low. Crude is trading at its support in month charts. Crude oil hits new lows because of excess supply from OPEC, which has increased further output. OPEC wants to put US Shale oil out of the market by keeping their price low where US Shale oil producing companies could incur losses if they will reduce their prices upto OPEC’s oil level.
– In overseas markets, energy stocks led losses in European stocks as crude oil prices continued to drop after a steep selloff overnight. Asian stocks tumbled after an overnight sharp slide in US stocks triggered by another plunge in oil prices and concerns about the political situation in Greece.