The recent sharp correction in the Indian stock market has triggered concerns among experts. The Nifty 50 index has declined by over 3% from its peak in just five trading sessions, amidst a notable surge in market volatility. Deepak Shenoy, founder of Capital Mind, commented on the situation on X (formerly Twitter), expressing the sentiment that the correction is akin to a doomsday scenario. However, he also noted that deep bear markets rarely commence when everyone anticipates it. The Indian stock market had witnessed a strong bull rally in the past year, with the Nifty 50 surging over 20%. However, this recent correction has been characterized by sustained selling from foreign institutional investors (FIIs), with total outflows exceeding ₹22,000 crore in May 2024. Earlier this week, eminent investor Shankar Sharma also voiced his concerns, highlighting the threat lurking beneath India’s bull market. He attributed the situation to overcapitalization driven by the greed of merchant bankers and operators. Sharma emphasized that these actions permanently damage balance sheets and could lead to a 90% decline in stock prices during the next bear market. The ongoing Lok Sabha elections, muted Q4 earnings, and outflow of foreign capital have further exacerbated the market uncertainty.
Stock Market Correction Raises Concerns Amidst Volatility and Elections
