Why did the stock market crash? Sensex-Nifty fell face down; Know the 5 big reasons for the decline

Stock Market Today: There was an uproar in the stock market this morning. On Monday morning, all-round selling was seen on Dalal Street due to which Sensex fell by more than 900 points and Nifty slipped below 23400. Weak signals from the global market, skyrocketing prices of crude oil and the rupee reaching record low have dampened the spirits of investors. By 9:37 am, the BSE Sensex fell sharply by 939.10 points (1.25%) to 74,298.89. Whereas NSE’s Nifty was down 284 points (1.20%) and was trading at 23,359.50.

Major reasons for sudden decline in the market

Crude oil prices cross $111

The main reason behind this big decline in the market is the rise in crude oil prices. Brent crude has increased by 1.72% to $ 111.14 per barrel and WTI crude has increased by 2.02% to $ 107.55 per barrel. In fact, tension is at its peak in West Asia after the drone attack on a nuclear power plant in the United Arab Emirates (UAE). After US President Donald Trump’s warning to Iran, the possibility of blockage in the world’s most important oil supply route, the Strait of Hormuz, has increased.

impact on india

India imports about 85% of its crude oil needs. Expensive oil will increase inflation in the country, affect the earnings of companies and increase the concern about current account deficit (CAD). Recently, the prices of petrol and diesel have increased by Rs 3 per liter, and experts believe that if crude remains expensive like this, then oil prices may increase again.

Rupee reaches record low level

The Indian rupee has weakened against the dollar for the fifth consecutive day, reaching a historic low of 96.2275. Due to war, the rupee is under constant pressure due to which importing crude oil will become more expensive. However, due to the intervention of RBI, there has been a brake on the decline to some extent, but with the US bond yield reaching 4.62%, foreign investors are continuously withdrawing money from the Indian market.

There was selling in every sector, relief only in IT

Today the selling in the market was so widespread that except the IT sector, all other sectors were trading in the red. The biggest decline was recorded in Nifty Consumer Durables by 2.51%, Reality by 2.29% and PSU Banks by 2.08%. Metal shares also fell by 1.75%. Tata Steel was the worst performing stock among Sensex companies, falling more than 4%. Apart from this, there was a huge decline in Power Grid, Adani Ports, Maruti Suzuki and Titan.

Support to IT sector

Export-oriented sectors are expected to benefit from the weakening of the rupee. For this reason, Infosys stood firm with a gain of 0.80% and Tech Mahindra with a gain of 0.09%.

What should investors do now?

According to Dr. VK Vijayakumar, Chief Investment Strategist of Geojit Investments, in these difficult times, export related sectors like pharma and IT seem more safe. Apart from this, the country’s big private banks are currently under pressure due to selling by foreign investors (FPIs), but are fundamentally strong and are getting the right valuations. In such a situation, long-term investors can take advantage of this decline and gradually include good stocks in their portfolio.

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