Share Market Crash Today: Investors got a big shock on the first day of the week in the Indian stock market. After an early rally on Monday, the market suddenly started a heavy sell-off. Both the main indices Sensex and Nifty registered a significant decline. By 3 pm, the Sensex fell 767.65 points, or 1.05 percent, to 71,704.68, while the Nifty fell 200.45 points to 22,320. Amid this upheaval in the market, the total market assets of investors are reported to have declined by around ₹ 6 lakh crore. However, some recovery was seen in the market in the final phase of the business.

The morning boom turned into a crash by afternoon

The Indian stock market started on a positive note on Monday. Investors were buoyed by some relief in crude oil prices and measures taken by the RBI to support the rupee. However, this boom did not last long. As profit-taking started at higher levels, major market indices moved into the red mark. At one point the Sensex had slipped nearly 1,100 points below its intraday high. On the other hand, the Nifty also fell below the crucial 22,350 level.

5 Big Reasons for Stock Market Crashes

1. Market pressure from high profitability

In the last two trading sessions, the market witnessed a bullish trend. The Nifty closed at 22,520.45 on Friday. After this boom, many investors started booking profits by selling their shares at higher prices. As a result, the market sold off and the major indices moved down sharply.

2. Pressure on key levels of Nifty

According to technical analysts, the 22,600 to 22,650 level was crucial for the Nifty, but the market could not sustain at this level. According to Srikant Chauhan, head of equity research at Kotak Neo, the 22,300 level is a key support for the Nifty. If the Nifty closes decisively below this level, the selling pressure in the market may increase further. In such circumstances, as per the technical analysis, the possibility of Nifty sliding towards the range of 22,150 to 21,750 was expressed.

3. Foreign investors selling for 11 consecutive days

One of the main reasons for the decline in the market is the continued selling by foreign institutional investors (FIIs). On October 9, foreign investors continued to withdraw capital from the Indian stock market for the 11th consecutive trading session. FIIs sold shares worth ₹ 3,568 crore net on the day. On the other hand, domestic institutional investors (DIIs) tried to support the market with net buying of ₹ 4,743 crore. However, continued foreign capital outflows kept pressure on the market.

4. Strong dollar and global uncertainty

The strength of the US dollar has also become a cause of concern for the Indian stock market. The dollar index hit a near 18-month high of around 102.5 as reported on October 12. Tensions between the US and Iran, rising global bond yields and higher crude oil prices are keeping investors cautious. During a strong dollar, foreign investors may shift capital out of emerging markets and into American assets. Its impact is also being seen on the Indian market.

5. Heavy selling in banking, IT and large stocks

In Monday’s trade, banking and IT sector stocks registered a significant decline. Government banking stocks like State Bank of India (SBI), Punjab National Bank (PNB) and Canara Bank were particularly under pressure. Besides, declines in major stocks like Bharti Airtel, Indus Towers and NTPC weighed on the major indices. Around 3 pm, the Nifty Bank index fell by 519 points and the Nifty IT index by 344 points.

Rupee strengthened, yet why the stock market crashed?

On Monday, on the one hand, the Indian rupee strengthened by about 1 percent against the American dollar, while on the other hand, the stock market experienced a major decline. The RBI has taken new measures to curb demand for dollars and curb speculative activities in the currency market. The move provided immediate support to the rupee. However, foreign investor sell-off in the stock market, high interest rates and concerns about corporate earnings remained. As a result, despite the strength of the rupee, the stock market could not sustain the rally.

Sensex closed down 547 points at the close of business

A slight recovery was seen at market close after a steep fall in afternoon trade. As of 3:32 pm update, the Sensex finally closed down around 547 points. Nifty also closed below 22,350.