It cannot be said when the Indian stock market will go up and when it will suddenly crash. The movement of Sensex and Nifty is changing very fast. Something similar happened on Thursday, February 19, the market’s main index Sensex fell by around 850 points during trading. At the same time, Nifty 50 also reached its day low of 25,567.75 during trade. Mid-cap and small-cap companies suffered more losses in this market sell-off. Investors lost approximately Rs 4 lakh crore. Now the question arises why the market fell so much today. Were there any negative triggers that caused investors to lose money?
In this fall of the stock market, the market cap of big listed companies of BSE reduced significantly. The market cap of BSE in the last trading day was Rs 472 lakh crore in the previous session. It reduced to Rs 468 lakh crore. That means investors suffered huge losses.
Why is the market falling
- Effect of profit booking visible- After the recent gains, profit booking is being seen in the domestic market. On Wednesday, Sensex and Nifty 50 continued their rise for the third consecutive session. After the end of major economic factors like Budget, India-US agreement and RBI policy and the completion of third quarter results, due to lack of new domestic factors, the market is witnessing volatility in stocks.
- Effect of Fed meeting- The January meeting of the US Federal Reserve shows that officials are divided on the future strategy. Some people believe that if inflation comes down then relief can be provided, while others believe that if price pressure continues then strictness will have to be continued. A prolonged pause in interest rate cuts or the US Fed raising rates again could strengthen the dollar. This may affect foreign investment in Indian markets. After seven consecutive months of selling in the cash market, buying by foreign investors has resumed in February.
- Market’s eye on America-Iran tension- A CNN report on Wednesday claimed that the US military is preparing to attack Iran by this weekend. Axios reported that this attack could not be a small but a major campaign lasting several weeks, which could create an almost war-like situation. The market is keeping an eye on the developments related to US-Iran relations. Experts say that investors are reducing their positions due to the fear of increasing tension at the end of the week.
- Increase in crude oil prices- The rise in crude oil prices has also affected the market. In the previous session, WTI crude futures rose 4.60% to $65.19 per barrel, while Brent crude futures rose 4.35% to $70.35 per barrel. On Thursday also, Brent crude reached $70.53 and WTI crude reached $65.4 per barrel. High oil prices are not considered good for the Indian economy and the rupee, because India is one of the largest oil importers in the world.
- Lack of immediate positive trigger- Experts believe that due to expected earnings and strong economic conditions, there may be a good growth in the domestic market in the calendar year 2026, but due to lack of new triggers, the market is facing difficulty in moving forward. Shares of large cap companies are now at fair valuation, but shares of midcap and smallcap companies are still expensive. For this reason the market is moving within a limited range. VK Vijayakumar, chief investment strategist at Geojit Investments, said in a Mint report that the Nifty index is trading at around 20 times the estimated profits for FY2027, while the NSE Midcap and NSE Smallcap indices are trading at 28 and 24 times. In such a situation, this market has become a good opportunity for sensible and agile investors.
Disclaimer: This article is for information only and should not be considered as investment advice in any way. TV9 Bharatvarsha advises its readers and viewers to consult their financial advisors before taking any money-related decisions.