There was a big devastation in the stock market on Thursday. On one hand, there has been a huge fall in the prices of gold and silver, on the other hand the stock market has also crashed. BSE’s Sensex fell by 2700 points, while NSE’s Nifty saw a fall of more than 700 points. In this market decline, investors lost more than Rs 13 lakh crore. Due to this decline, the market cap of companies listed in BSE came down to approximately Rs 426 lakh crore.
There was a big fall in the stock market on March 19. BSE Sensex fell 3.26% percent or 2,496 points and closed at 74,207. It fell by about 2700 points during the day’s trading. On the other hand, NSE’s NIFTY fell by 3.26% i.e. 775 points and closed at 23,002.15. Due to slight improvement in the market by the time of closing, the market cap of BSE listed companies decreased by about Rs 12 lakh crore, due to which the total market value came down to about Rs 427 lakh crore.
The entire market turned red
All 30 shares of BSE Sensex closed in the red. Eternal and HDFC Bank fell by more than 5%, causing the biggest loss. Bajaj Finance, Mahindra & Mahindra and Larsen & Toubro also fell up to 45%. All sectors of NSE also remained in decline. Nifty Auto fell more than 4%, while Nifty Realty was down around 4%. Overall, 2,679 shares fell, 532 rose and 95 remained unchanged.
Due to these reasons the market collapsed
1. Crude oil prices increased
The price of crude oil again reached above $116 per barrel. This increase was due to increasing tension in the Middle East and the closure of the Strait of Hormuz. Qatar’s big oil company said that Iran’s missile attack caused significant damage to the LNG plant. UAE also closed the gas facility. US President Donald Trump warned Iran that if there is another attack, a big response will be given.
2. Fed’s strict policy
The Federal Reserve of America did not make any change in interest rates. Chairman Jerome Powell said that inflation is not decreasing as expected. The Fed kept the interest rate at 3.50-3.75% and indicated a cut only once this year. The Fed estimates that inflation could be 2.7% by the end of the year, which is higher than earlier estimates.
3. Fall in global markets
American markets also fell. S&P 500 closed down about 1.36%, Nasdaq down 1.46% and Dow Jones closed down 1.63%. In Asia, Japan’s Nikkei fell 4%, South Korea’s Kospi fell 3% and Hong Kong’s Hang Seng fell more than 2%. European markets also remained down by about 2%.
4. Rise in bond yields and selling by foreign investors
America’s bond yields increased. The 10 year yield reached 4.26% and the 2 year yield reached 3.77%. There has been a lot of increase in these in March. Apart from this, foreign investors are continuously withdrawing money from the Indian market. He sold shares worth Rs 2,714 crore on Wednesday. This was the 14th consecutive day of selling.
5. Pressure on rupee and profit booking
There was a rise in the market in the last few days, so investors started taking profits. This also increased the decline. Also the Indian Rupee weakened and reached near record low. Due to increase in the price of crude oil, imports are becoming expensive, due to which there is pressure on the rupee. According to experts, the rupee may remain weak in the coming times also.
Also read- Gold and stock market are in bad shape, gold prices decreased by Rs 18 thousand in March.