By Ruma Dubey

The stock market has truly crashed and literally fallen through the floor. Falling below 650 points at one point, everyone’s heart was in their hands.

It was widely expected that the market will actually do well today as the Bombay High Court yesterday stayed the minimum alternate tax (MAT) demand from the income tax department. This stay came purely on ‘technical grounds’. The Court stated that it was staying all proceedings against the fund as the Tax department had passed a final order and not a draft order as required. The final order meant that the Aberdeen cannot appeal in  front of a disputes resolution panel. And now the next hearing on the same is scheduled for 23^rd June.

This means that the market really had no reason to cheer in this verdict. The Court stay order was purely technical and not a studied, argued, verdict. The MAT issued thus continues to hang; it has just been postponed to 23^rd June for now.

But the markets were expected to react a bit better because it was at least a relief for now. This surely should not elicit such a huge fall. So the reason is something else?

There are some saying that the sell-off today was sparked by a slump in Nifty futures listed on the Singapore exchange, which is now trading at a discount to domestic Nifty futures. This, some dealers say, went on to create a panic and led to a dominos kind of effect.

Another big reason is a selloff in global sovereign bonds which has pushed Asian stocks to some two-week low. Currently, investors seem to have lost all patience in the consistently shrinking yields on bonds. This sell-off in bonds is triggered by the persistent rise in German Bund yields which in turn is driven by fear that Greece might default and further anxiety over its excessively long positions in European debt.

Along with rising German Bunds, US Treasuries and British Gilts have been falling. Thus worries over Eurozone monetary conditions and maybe a volatile unwinding of positions in Euro and Eurozone equities is causing the jitters, leading to a sell-off in all other asset classes.

And the Federal Reserve Chairman, Janet Yellen is scheduled to speak tonight and all eyes and ears will be hooked on to see if she gives some indication or guidance about when to expect a rate hike.

All these were mere reasons – we are trying to justify this unprecedented fall with some logical explanation. Maybe to some extent global factors are effecting but the Indian markets are indeed falling under its own weight. But the real reason is that the Indian market is looking for that one positive trigger and that has to come from the only the Government of India. Currently disillusionment is starting to come in with Modi finishing one-year in office in the next few days. Impatience is setting in.

Aggravating matters is the MAT issued. FIIs are holding our markets to ransom. Collectively, over the past 13 sessions, FIIs have sold a net of more than $1.7 billion worth shares.

But for us, every adversity should be an opportunity. Take this fall as a cue to buy into some quality stocks. Our Editor, SP Tulsian recommends five great picks in this market for the long term - HDFC, Century Textiles, LIC Housing, Wockhardt and Shriram Transport.

PS: And no, Salman Khan getting convicted and getting jail for 5 years is not THE reason for the falling market!