October was the worst month for the stock market after Corona, did India’s money shift to China? – Read

The month of October brought blood to those who invest in the stock market. The stock market witnessed a severe decline throughout October. Such a long correction has been seen in the market that this has been the worst month so far after the fall in the stock market during the Corona period. In such a situation, the big question is that where have the good days of the stock market disappeared? Is India’s money shifting to China or America or somewhere else? Could the market still have to face worse times?

If we look at the figures of October, BSE Sensex has fallen by 5 percent so far in this month. The condition of NSE Nifty is also similar. In such a situation, the decline of the market is indicating many things, while on the other hand it has also become a puzzle for the investors. The situation is such that people take bath in the morning, get ready and sit down to trade in the hope that some stock will move in the market today, and by the evening, seeing their portfolio deteriorating further, they close it in disappointment.

When the market took a dive during the Corona period

The biggest dip was seen in the market in March 2020, when the lockdown was announced during Corona. This decline was 23 percent. Just before this, when the rumors of Corona had started, in February 2020, a decline of 6 percent was recorded in the Sensex. After this, the highest decline of 5 percent has been recorded in October 2024. Earlier such a big decline was recorded only in June 2022 i.e. 5%.

In the last four years, the Sensex has seen a decline on several occasions, but it has not gone above 4 percent. May 2020, November 2021, December 2022 and September 2022 were the months when the market witnessed a decline of up to 4 percent.

Rs 29 lakh crore cleared

The growth that the stock market in the country started after 2022 seemed to end in October 2024. During this period, the best boom was seen in the IPO market. The three biggest IPOs of the country so far came in the post-Corona period. The IPOs of Hyundai Motor India, LIC and Paytm raised the most money from the market.

At the same time, shares of companies like Bajaj Housing Finance, Jio Financial Services, Ola Electric and Tata Technologies got listed at a premium after the IPO and put a lot of money in the pockets of investors. But in October 2024, the stock market environment robbed the investors and about Rs 29 lakh crores were wiped out. In fact, the total market capitalization of all the companies listed on Sensex has decreased by Rs 29 lakh crore till the market closed on Wednesday.

Has money gone from India to China?

ET has told in one of its news that in the month of October, there has been a withdrawal of Rs 82,000 crore from the stock market. Foreign portfolio investors (FPI/FII), who were investing heavily in IPOs and equities, have withdrawn so much money from the Indian market in the month of October. Experts say that after Corona, China’s economy is once again back on track. There the government has taken such steps which are necessary for economic boost. Due to this, there is a possibility that FPIs are withdrawing money from the Indian stock market and shifting it to China.

Some time ago, China’s central bank ‘People’s Bank of China’ took a big step to revive the economy. He relaxed the rules regarding money kept as reserves in China’s commercial banks. Due to this, the banks there got additional liquidity of about 142.6 billion dollars, due to which they can now increase their focus on consumer and housing loans. This will work to increase customer buying in China’s economy. Anyway, China has set a target of achieving 5 percent growth this year.

Bear’s shadow is on the stock market (Photo: Meta AI)

Is the money not returning back to America?

Another reason for FPI withdrawal is believed to be the presidential elections in America. Here a tough competition is being seen between Kamala Harris and Donald Trump. Many other big businessmen, including the world’s richest man Elon Musk, who dominates the market as a big mover, are openly supporting Donald Trump.

In this way, money from all over the world is shifting there in the hope of the American stock market doing better. Inflation has come down in America and the Central Bank there, the Federal Reserve, has also started a series of interest rate cuts. Due to this also, FPI money has gone out of the Indian stock market in October.

Effect of this announcement of SEBI

Recently, market regulator SEBI has also announced changes in the rules related to Futures and Options (F&O). This step of SEBI is also being considered as the reason for major changes in the stock market. SEBI has changed many rules to limit the role of small traders in F&O business and to protect people who are investing money from risk, which includes increasing the lot size, increasing the limit of money. In such a situation, people are also turning to equity to fulfill this. Money is being withdrawn and its impact is visible on the market.

Rise in gold and silver prices (Photo: Unsplash)

Rising gold and silver, and international environment

One of the changes in the stock market is the atmosphere of tension created at the international level. The conflict between Israel and Iran has served to further increase the instability in Western Asia, which has persisted since 2022 due to the war between Russia and Ukraine. Meanwhile, investors have increased investment in gold and silver for safe investment. In India too, where the price of gold has crossed Rs 80,000 per 10 grams, the price of silver has crossed Rs 1 lakh per kilogram. In this way, this has also become the reason for the decline in the stock market.