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On the last trading day of the week i.e. Friday, there was a big decline in the stock market. During this period, the Sensex fell 694 points or 0.85 percent to close at 81,306.85, while the Nifty fell 214 points or 0.85 percent to close at 24,870.10. During this time, the stock market was seen to be a wide decline. BSE midcap closed down 0.23 percent and Smallcap fell down by 0.35 percent.
On August 22, the process of the last six sessions in the stock market came to an end and the lead for the last three days was over. Let us know from each one, what can be due to such a big fall in the stock market today?
1. Profit Booking
Experts believe that a major reason for today’s decline in the domestic market is profit booking after strong purchases of six consecutive sessions. The Sensex gained about 1,800 points in the last 6 business days. This was the longest lead since the end of April this year. However, the market remains positive for the long term. Nevertheless, investors are making some profits due to tariff uncertainty and weak income.
2. Companies bad results
Weak first quarter (Q1) results of companies have weakened the confidence of investors in sectors like banking and IT, where profits are currently being seen. Some experts consider this to be a major reason for the trend “Sell-on-RISE” trend in the market.
3. Russia-Ukraine Tension
The growing stress between Russia and Ukraine is that the war is not close to ending at the moment. For India, it is negative from both economic and geopolitical perspective. Crude oil prices have increased by more than 1% as there were reports of new tension in both countries. This is harmful to India, because India is one of the largest oil importing countries in the world.
4. American tariff
Investors are concerned about the tariff of US President Donald Trump. The secondary tariff of 25 percent will be applicable from August 27, which will make the total tariff on Indian goods 50 percent. The Indian government said that Indian goods worth about $ 50 billion will be affected when this 50 percent tariff of America will be applicable. So far, the Trump administration has not given any indication to remove these secondary tariffs or extend the deadline.
5. Jerome Powell’s speech
The vigilance of investors from all over the world also appeared in the Indian market before the speech of American Federal Reserve Chairman Zerome Powell on Friday (August 22). He will speak at 10 am (EDT) ie Indian time at 7:30 pm. Powell’s term ends in May next year, so this will be his last speech as a fed chair. Experts believe that there may be some indications about the direction of the monetary policy of American Fed. The attention will also be on how the Fed looks at the development and inflation of the American economy.