why market is down today: Why did the stock market suddenly crash after 3 pm? These are 4 big reasons

why market is down today: Friday was a very heavy day for the Indian stock market. The market crashed due to heavy selling in the last hour of trading. Uncertainty regarding the US-Iran peace agreement, changes in MSCI index and high prices of crude oil created fear in the minds of investors, due to which people booked profits heavily.

The market situation was like this

BSE Sensex: closed at 74,775.74 with a huge fall of 1,092.06 points (1.44%). From the day’s high (76,220.02), the Sensex fell by about 1,450 points. While NSE Nifty50 fell 359.40 points (1.5%) and closed at 23,547.75. Nifty also slipped far below its high of 24,002.8. There was all-round weakness in the market. The number of falling shares on BSE was 2,507, while only 1,568 shares closed with gains.

Why did this sharp decline occur in the market?

1. Suspense regarding America-Iran dispute

The biggest reason for the market decline was the increasing uncertainty regarding a permanent peace agreement between America and Iran. The market had made a good recovery in April after the huge fall in March, hence seeing the increasing geopolitical tension, investors thought it best to book profits.

2. MSCI rebalancing shock in the last half hour

The fall suddenly increased in the last 30 minutes of trading because the rule for changing MSCI’s May index came into effect. On such occasions, big foreign funds reshuffle their portfolio, due to which huge fluctuations are seen in big stocks. According to reports, India’s weightage (share) in the MSCI Emerging Markets Index is expected to decline from around 20% to around 11.2% now.

3. Crude Oil Tension

Even though Brent crude prices have declined by about 19% in the month of May, they are still more than 27% above the level before the Iran dispute. India imports most of its oil needs, so expensive crude is always a headache for our economy (inflation and current account deficit).

4. Distance from foreign investors (FIIs)

Market experts say that due to expensive valuations of Indian shares, crude oil prices and lack of any big ‘AI boom’ in the IT sector, foreign investors are currently investing money in India only thoughtfully.

status of shares

Reliance Industries declined by 7.7% this month, which pulled the index down the most. Apart from this, heavy banking and IT stocks also declined. After four consecutive months of rise, ONGC fell 11.4% this month. At the same time, ITC shares fell by 8.9% due to fear of volume decline due to increase in cigarette prices.

Adani Enterprises shares jumped 22% after US authorities dropped fraud charges against Gautam Adani. Apart from this, due to domestic demand, metal stocks like Hindalco (up 8.6%) and National Aluminum (up 6.3%) witnessed good gains.

Going forward, investors’ eyes will remain focused on the conditions in the Middle East, the movement of crude oil and the economic data of the country.

The post why market is down today: Why did the stock market suddenly crash after 3 pm? These are the 4 big reasons appeared first on Latest.