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Market indices fell sharply on Monday as investor
sentiments remained jittery amid weaker global cues and the risk of a market
correction. The S&P BSE Sensex fell over 1,000 points while the NSE Nifty
50 fell nearly 300 points.
Some countries in Europe are witnessing a fresh rise
in Covid-19 cases. While Austria is believed to be reintroducing a lockdown to
curb new infections, some other countries such as Germany, Slovakia, the Czech
Republic and Belgium may introduce precautionary measures. While the world is
better equipped to deal with the pandemic, a sharp jump in cases across Europe
could hurt the global economy and have an impact on most stock markets around
the world.
Domestic stock markets have been witnessing increased volatility over the past
few weeks due to negative sentiments brewing in global markets. Some of the
reasons hurting global sentiments are new Covid-19 cases in some parts of
Europe and the risk of rising inflation, triggered by higher input costs.The bullish momentum observed in the domestic market for months seems to be
fading and it could be the first signs of a correction that some experts had
predicted earlier.
MAJOR
STOCKS IN RED
Another reason
why the Sensex and Nifty fell during today's trading session can be attributed
to a fall in major stocks such as Maruti Suzuki (2.93%), Paytm (15.09%),
Reliance Industries Limited (4.09%) and State Bank of India (3.17%).
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"Biggest IPO, biggest crash"
After india’s largest-ever IPO paytm parent
one97 communications set another record on debut the biggest drop on opening
day for share sales worth more than Rs 1000 crore.
The stock listed at Rs 1950, a discount of 9.3%
to its offer price of Rs 2150, and closed at Rs 1564 down 27%. This is the first
of six recent startup ipo’ s to list below the offer price. Anil
ambani-controlled reliance power had plunged 21% on debut in february
2008 after an Rs 11700 crore IPO. Investo Rs lost nearly
Rs 5000 crore of their Rs 18300 crore investment in the one97 IPO. While
institutional investors lost Rs 4254 crore, retail investors' net loss amounted
to Rs 567 crore. High net worth induvial investors lost Rs 166 crore.In comparison, shares of its new-age peer zomato
ltd. Had hit the upper circuit on its
listing day, before ending the trading session 66% higher. Shares of nykaa’s
parent fsn e-commerce ventures ltd. Nearly doubled over its issue price on
market debut.We hope
the paytm story can inspire entrepreneurs, even for the ones who do not have
the background, but we hope this inspires them that they can do it. we believe paytm’s business model lacks focus and
direction. Unless paytm lends, it can’t make significant
money by merely being a distributor. We therefore question its ability to
achieve scale with profitability. Paytm financials are
not very impressive and the growth prospects seem limited... Obviously the
company lacks a clear path to profits.