Why Sensex crashed 1400 points in two days — explained

livemint.com:

Stock market today: Key benchmark indices extended sell of for second stright session on Thursday as global market cues continue to remain weak after Fitch downgrading US credit rating. Sensex today opened lower and went on to hit intraday low of 65,069 levels, logging near 1400 points in the last two trade sessions. Nifty 50 index and Bank Nifty index too remained under sell off pressure and went on to lose their immediate support placed after the closure of Wednesday deals.

Nifty today breached its support placed at 19,400 and made intraday low of 19,296 while Bank Nifty index broke down its support placed at 44,500 and touched intraday low of 44,279 levels. In broad markets, small-cap and mid-cap indices have lost to the tune of over 0.30 per cent and around one and half hour of trade session is still left on Thursday. According to stock market experts, Indian stock market was climbing a new highs on a regular basis and market was in wait of a strong profit-booking trigger that happened in the form of Fitch downgrade of US credit rating on Tuesday.

However, they maintained that Indian stock market is one of the strongest emerging markets and FIIs are expected to continue pumping money in the Indian markets after this credit rate downgrade. They advised fresh investors to add consumer durable and chemical stocks in their portfolio while initiating bottom fishing. However, they advised value pickers to remain vigilant about important levels in regard to Sensex, Nifty and Bank Nifty.