Reacting to weak GDP numbers, the Sensex and Nifty dropped over 2 per cent on Tuesday. A fall of more than 2 per cent in the benchmark indices isn’t very common.
This is only the second time that the Sensex has declined 2 per cent or more this year. Global indices, particularly those in the US and China, have seen more volatility this year amid a flare up in trade tensions. Indian markets are relatively insulated by the trade situation. However, weakening domestic growth has weighed on investor sentiment.
Analysts say a sharper decline in the indices can’t be ruled out, given the uncertain economic environment. Last year, the Sensex logged five sessions of over-2 per cent declines. Calendar year 2017 was one of the most tranquil year for the market, with not even a single session recording a 2-per-cent drop.