InvestorQ : Why did the stock markets crack so sharply after opening so strong on 02 March? What could have triggered such massive selling?
Mitali Bhutta made post

Why did the stock markets crack so sharply after opening so strong on 02 March? What could have triggered such massive selling?

Answer
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Dawn Cherian answered.
7 months ago


From being 600 points in the positive to closing 150 points in the negative it was a value meltdown of 750 points for the Nifty. It was clearly a case of short covering but could not sustain at higher levels. The Fitch downgrade of growth to 4.9% was an overhang and the weak auto number also played on the markets at higher levels. Also, the global cues were still weak and hence the Sensex found it hard to sustain at higher levels. Having seen the fall, it is now becoming increasingly clear that the market cannot sustain higher levels with the current sentiments. It clearly needs much strong triggers and they do not exist right now; either at the domestic front or the international front. Also, short covering has limited shelf life and finds it hard to sustain if there is no follow up buying in stocks.