NEW DELHI: Key equity indices Sensex and Nifty lurched lower sharply in opening deals on Monday, tracking weakness in global markets.
A nearly 380 points fall in the Sensex index came in the wake of a sharp selloff in US stocks as concerns about the health of the world economy spooked investors.
Around 9:20 am, the BSE Sensex was 375 points, or 0.98 per cent, down at 37,790, with only three stocks in the green and 28 in the red.
The Nifty pack was 108 points, or 0.95 per cent down at 11,348, with seven stocks advancing and 43 declining.
Midcaps and smallcaps also crumbled as the BSE Midcap and Smallcap indices were 0.93 per cent and 0.87 per cent down, respectively, around that time.Let's take a look at the factors that triggered the massive selloff in Indian equities this morning:Fear around recessionThe spectre of recession resurfaced and a wave of selling dragged US stocks to their biggest one-day percentage losses since January 3 after the 10-year treasury yields in the US slipped below three-month rates on Friday.
As per Reuters, concerns about the health of the world economy heightened last week after cautious remarks by the US Federal Reserve sent 10-year treasury yields to the lowest since early 2018.
Historically, an inverted yield curve - where long-term rates fall below short-term - has signalled an upcoming recession.Uncertainty over BrexitThe uncertainty around Brexit is keeping markets nervous.
After suffering two defeats, the British Prime Minister Theresa May is trying her best to get the deal cleared by the British parliament which is staring at possibilities, including a no-deal Brexit to Brextension and even exit from Brexit.Rupee's weaknessThe Indian currency slipped by 21 paise today, after suffering a loss of 12 paise against the US dollar on Friday.
Even as the domestic currency still remains the best performing emerging market currency over last one month gaining over 3 per cent, its fresh weakness weighed on investor sentiment.Technical viewThe Nifty index formed a bearish candle for the second straight session on Friday, which resulted in a Doji kind of indecisive formation on the weekly chart.
Nifty last week faced resistance exactly at the lower end of the 30-month-long upper rising channel.
It had breached this channel on the downside in the first week of October.