Market stay in red, Nifty nears 11,000. Five reasons why stocks are taking a hit

Liquidity crunch fears, Consistent selling by FIIs, rupee volatility, rising crude oil prices and trade war tensions weighed on sentiment.
The market continued to reel under selling pressure on Monday. Liquidity crunch fears, consistent selling by FIIs, rupee volatility, rising crude oil prices and trade war tensions weighed on sentiment.

The Nifty has fallen below 11,100 but has been trying hard to defend the psychological 11,000-mark, falling 60 points to 11,083. The 30-share BSE Sensex fell 179.74 points to 36,661.86 in the morning trade.

Here are five factors that are dragging the market:

NBFC Debt Crisis

Nifty Financial Service index fell 2 percent which indicated that fears of liquidity crunch have not abated yet.

Stocks like Indiabulls Housing Finance, Bajaj Finance, M&M Financial, etc. fell 3.5-6 percent. In addition, the country's largest housing company HDFC itself lost 4 percent, though DHFL recovered recovered some Friday's losses to trade 13 percent higher at the time of writing this article. On Friday, DHFL lost 42 percent.

Crude Oil Prices

Crude oil prices increased sharply as US markets tightened just weeks ahead of Washington's plan to impose new sanctions against Iran with will be effective from November. In addition, the expectations of major traders and banks that prices could rise over $90 per barrel in coming months also supported.

Brent crude futures were at $79.92 per barrel, up by 1.45 percent from their last close and US West Texas Intermediate (WTI) crude futures rose by 1.31 percent to $71.71 a barrel

Trade War Fear

The US-China trade war continues to be in focus as both countries imposed fresh tariffs on each other's goods today.

World’s biggest economies showed no signs of backing down from an increasing bitter trade dispute that has rattled financial markets.

FPIs turn net sellers in September

Overseas investors have pulled out a massive Rs 15,365 crore ($2.1 billion) from the capital markets in September so far, after putting in funds during the previous two months, on widening current account deficit coupled with global trade tensions.

Technical Factors

The Nifty50 slipped below its crucial support placed at 11,100 levels in the first 60 minutes of trade on Monday. After Friday’s carnage, most analysts suggest that we might be in for some more volatility ahead of F&O expiry.

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