stock market
Strong selling continued in the Indian stock market for the third consecutive session on Friday, April 24. During this period, both the benchmark indices – Sensex and Nifty 50 – fell by 1%. The 30-share Sensex fell by more than 1000 points, or 1%, to the day’s lowest level of 76,680.75, while the Nifty 50 also fell by 1% to 23,899.25. Investors suffered a loss of more than Rs 6 lakh crore in a day, as the total market value of companies listed on BSE fell from Rs 466 lakh crore in the previous session to Rs 460 lakh crore in this session.
At the same time, in just three consecutive sessions, the Sensex has fallen by more than 2,400 points or 3%, while NSE’s main index Nifty 50 has fallen by 2.6%. Investors have suffered a loss of about Rs 9 lakh crore in three days, because the total market value of companies listed on BSE on April 21 was Rs 469 lakh crore. By the time this news was written it had become Rs 460 lakh crore.
Why is the stock market falling?
Let us look at the five main reasons due to which there is strong selling in the Indian stock market.
- No clear information regarding US-Iran peace agreement- There is selling pressure in the market because there are no clear signs that any peace agreement between Washington and Tehran will be reached soon. Despite the ceasefire, both the countries have not reduced their strictness towards each other. According to media reports, US President Donald Trump said on Thursday that he has ordered the military to “shoot and destroy” small Iranian boats laying mines in the Strait of Hormuz. On the other hand, Iranian President Massoud Pezeshkian on Thursday said that all Iranians stand united against any external attack, so that the aggressor will have to repent for his actions. The markets continued to be hit by bad news and a possible agreement on the Middle East conflict. Commenting on the expectations, VK Vijayakumar, Chief Investment Strategist, said that the medium to long term direction of the market will be clear only when there is clarity on the resolution of the Strait of Hormuz. Till then, crude oil prices will continue to fluctuate, which will also impact the market.
- Sharp increase of 18% in oil prices this week- This week there has been a tremendous rise in the prices of crude oil, and they have increased by about 18%. The reason for this is that the second round of talks could not take place between America and Iran, because neither side reached Pakistan for talks. Moreover, the possibility of a peace agreement also remains uncertain.
- Rupee went below 94 level- The Indian Rupee has once again fallen below the level of 94 per dollar, which has increased the pressure on the market environment. According to a PTI report, the Indian currency fell 24 paise to 94.25 against the US dollar in early trade on Friday, continuing its decline for the fifth consecutive day.
- Strong selling by foreign investors- After buying Indian shares for a few days this month, foreign institutional investors (FIIs) have once again started selling Indian shares vigorously. In the last four sessions, FIIs have sold Indian stocks worth more than ₹8,300 crore in the cash segment. According to experts, after buying for three days last week, foreign investors have started selling again this week. Due to this, along with the rise in crude oil prices, the rupee has once again fallen below the level of 94. If this trend of selling by foreign investors continues, then the shares of big companies will remain weak.
