The decline in the stock market has caused a big loss.
An executive order by US President Donald Trump created such a ruckus in the India’s stock market that investors drowned Rs 5.63 lakh crore. The Sensex and Nifty saw a decline of 1 percent till the stock market shut down. Where the shares of the country’s largest company saw a decline of about 2 percent. On the other hand, Pharma Company Sun Pharma saw 3.40 percent decline in shares of Tata Steel. In fact, an order has been issued to impose 25 percent extra tariff from Trump Administration.
This tariff will be implemented after late at 12 o’clock. By the way, Prime Minister Narendra Modi said in a program that Trump’s tariff will be responded to. Also, this tariff will not see any effect on India. In fact, the stock market has suffered more damage due to additional tariffs on pharma and steel. Let us also tell you what kind of figures have been seen in the stock market? Also, what are the other reasons for the stock market sinking?
Big fall in stock market
There has been a big decline in the stock market on Tuesday. If we look at the data, the Bombay Stock Exchange’s major index Sensex closed over one per cent, ie 849.37 points to close at 80,786.54 points. Whereas during the trading session, the Sensex fell 949.93 points to 80,685.98 points. According to experts, Sensex and decline can be seen in the coming days.
On the other hand, the National Stock Exchange’s Promotion Index Nifty fell by 255.70 points to close at 24,712.05 points. Whereas during the business session, the Nifty saw a decline of 278.15 points and the Nifty came to the lower level of the day with 24,689.60 points. However, during the business session, there was a time when there was hope of recovery in Sensex and Nifty. But the Sensex and Nifty Deep Dive started about an hour before the stock market was closed.
Large decline in these shares
Reliance Industries, the country’s largest company, which has the third largest part in Nifty, broke over 2 per cent on Tuesday, causing the index down due to selling in major areas. Financial stocks declined by 1.4 per cent, while big shares like HDFC Bank and ICIC Bank declined by 0.8 per cent to 1.5 per cent. Pharmaceuticals shares declined by 1.7 per cent, while big shares like Sun Pharma declined by more than 3 per cent. Bank of America had rated the stock as ‘underperform’, citing the risk of premium valuation.
Consumer shares were the only attractive center, with the Nifty FMCG index 0.8 per cent. Meanwhile, textile, chemical and shrimp growers also suffered damage, which are considered particularly sensitive to new American tariff measures. In single shares, Vodafone Idea declined by 10 per cent. There were reports that there was no possibility of further relief by the government on its long -term dues. The broad market also came under pressure, there was a decline of 1.6 per cent in mid-cap stocks and 2 per cent in small-cap stocks.
Major reasons for decline in stock market
- American tariff applicable from midnight:President Donald Trump declined the markets after India imposed an additional 25 per cent tariff on Indian exports related to oil purchasing oil from Russia, causing the current tariff to double to 50 per cent. Indian exporters are now facing the highest number of American charges worldwide, which is more than rivals like Vietnam and Bangladesh, so investors hoped whether it would be delayed or compromised. Instead, the confirmation of the tariff dashed the expectations and affected the perception in early trade. According to the Homeland Security Notice, the new fee will apply to the goods coming from the Eastern Standard Time (EDT) (EDT) or 9:31 pm on Wednesday at 12:31 am (IST) at the US or the goods coming out of the warehouse for consumption in the US.
- Profit booking after last week’s speed: Last week, due to optimism on the GST reform, investors made profits. Prime Minister Narendra Modi had said earlier this month that the government intends to reduce GST rates on many goods and services till Diwali, which is India’s busiest shopping season. The proposals that are being discussed include reduced GST from 28 per cent to 18 per cent on small cars and reduced health and life insurance premium to 5 per cent or zero. Financial shares were down to fall on Tuesday, the Nifty Bank index was seen 1.3 per cent and the Nifty PSU bank index below 2 per cent. While both HDFC Bank and ICICI Bank recorded a decline of about 1 percent. IT companies, which earn a large part of their revenue from the US, closed down by 0.6 per cent.
- Selling of foreign investors: Foreign investors (FIIs) on August 25 withdrawn Rs 2,466 crore from Indian equity, while domestic institutional investors made net purchases of Rs 3,176.69 crore. This selling is part of a widespread trend: FII has sold around Rs 31,889 crore in eight areas in the first fortnight of August, in which the financial and technology sector was at the forefront. So far this month, net equity sales have been Rs 20,976 crore, which increases the withdrawal of July. So far this year, about 1.2 lakh crore rupees have been withdrawn from the FII stock market. Brokerage firm Jefferies said on August 13 that the position of foreign portfolio investors in India is at the “low level of the decade”. Although stable domestic investment is helping to reduce this effect, analysts have warned that this bounce may prove to be short -lived.
- Rupee falls: On Tuesday, the Indian rupee fell 0.1 per cent to close at 87.68 per dollar in the fifth consecutive trading session, as the traders were preparing to impose 50 per cent tariffs on Indian goods from August 27. The fall in the rupee increased the selling pressure in the stock markets, as the weak rupee increases the import cost and reduces corporate corporate margin. Meanwhile, the dollar remained under pressure even after President Donald Trump announced the removal of Federal Reserve Governor Lisa Cook, citing the allegations of Morgase Fraud. This was an unprecedented step that shook faith in Fed’s freedom. The dollar index, which monitors the dollar position against various currency, fell 0.05 per cent on Monday after a 0.7 per cent gains. Vinod Nair, the research head of Geojit Investments, said that the continuous decline in the rupee is increasing and foreign institutional investment could be further affected.
- Foreign stock markets fall: Global stock markets fell below record height among investors due to the increase in fresh political upheaval and policy uncertainty in Washington. US President Trump said that he was removing the Federal Reserve Governor Lisa Cook from the board and accused him of irregularities in acquiring morning loans. The recent conflict with the President’s Fed tarnished the policy approach before the central bank’s 16-17 September meeting. Japan’s Nikkei fell by about 1 percent, while Europe’s Stoxx 600 fell 0.8 percent. In France, the government’s instability promoted a huge decline in bonds and banking shares. Investors are now waiting for the US personal consumption expenditure data to be released on Friday, which is Fed’s favorite inflation indicator.
- Crude oil on two weeks peaks: Crude oil prices fell on Tuesday, but lived around the highest level of two weeks, increasing concerns about the growing input cost for Indian companies. Brent crude fell 51 cents or 0.7 per cent to $ 68.29 per barrel, while West Texas Intermediate fell 57 cents or 0.9 per cent to $ 64.23 per barrel. In the previous season, both benchmarks had climbed around 2 per cent, with WTI above their 100-day moving averages, as traders were monitoring the developments of potential supply disruption in the Russia-Ukraine conflict.
Investors lost 6 lakh crores
Investors have also suffered a big loss due to a major decline in the stock market. The loss of investors is connected to the market cap of BSE. According to the data, a day before the market cap of BSE was Rs 4,55,02,643.25 crore, which came to Rs 4,49,39,255.92 crore after the stock market was closed on Tuesday. This means that investors suffered a loss of Rs 5,63,387.33 crore on 26 August. According to BSE data, investors have lost Rs 6,88,156.53 crore in three business days.