Sensex and Nifty Witness Sharp Decline Amidst Valuation Concerns and Regulatory Scrutiny
On March 13, both the benchmark indices Sensex and Nifty started with promising gains but soon faced a significant downturn, primarily due to growing concerns surrounding what analysts described as 'frothy' valuations within the mid- and small-cap segments. Investors witnessed a broad-based sharp fall as the day progressed.
As the trading day came to a close on March 17, the Indian market experienced a deep plunge into negative territory, continuing the trend of broad-based selling and the ongoing meltdown in the mid and small-cap sectors. This prolonged downturn continued to unsettle investors.
Initially, the Indian benchmarks had a positive start fueled by moderate Consumer Price Index (CPI) data and steady growth in industrial production. However, despite this optimistic beginning, the indices failed to maintain their gains as selling pressure intensified in the latter half of the trading session. This downward spiral pushed the Nifty below the crucial psychological level of 22,000.
The market turmoil was further exacerbated by comments made by SEBI Chairperson Madhabi Puri Buch, who hinted at possible manipulation in the listings of Small and Medium-sized Enterprises (SMEs). Her statement came amidst ongoing investigations by the market regulator into investment banks regarding allegedly inflated subscriptions in SME Initial Public Offerings (IPOs). This revelation added to the already prevailing unease among investors, contributing to the broad-based selloff observed in the market.
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