Budget Day jitters: Sensex crashes over 1,300 points
What's the story
The Indian stock market witnessed a major crash on Wednesday, with the benchmark indices Sensex and Nifty falling sharply. The fall came after a strong start to the day, led by investor profit booking amid Budget Day volatility. The Sensex fell to 80,931.41, down 1,338.37 points or 1.63%, while the Nifty declined to 24,826.25, down 494.40 points or nearly 2%. Major laggards in the Nifty50 pack included Hindalco Industries, Coal India and SBI which fell up to 5%.
Future outlook
Markets likely to remain volatile today
Ponmudi R, CEO of Enrich Money, an online trading and wealth-tech firm, said the markets are likely to remain highly volatile. He added sharp moves could be seen in either direction depending on key announcements around fiscal policy, capex push, sector-specific incentives and the fiscal deficit target. This is in line with historical trends where equity markets have witnessed sharp swings during Budget speeches.
Market indicators
VIX rises over 17%
The India VIX, a measure of market volatility and investor uncertainty, rose over 17% to 15.66. A rise in the volatility index usually indicates higher nervousness among investors, often leading to cautious trading and increased short-term fluctuations in equity markets. Additionally, the increase in Securities Transaction Tax (STT) on futures from 0.02% to 0.05% also impacted shares of BSE and Angel One which fell up to 10%.