Stock market
Ever since the US President Donald Trump has increased the H1B visa fee. Since then, the stock market has been consistently hitching. Since the Trump visa order, the investors have once again created doubts about the trade deal between the two countries. Because of which the market is feeling even more pressure. In four consecutive days, the stock market has seen a decline of more than one and a half percent. The special thing is that the atmosphere created by the GST reform for the stock market, the edge that had gained half of the edge was wiped out due to this decision of Trump and investors suffered a big loss.
The question is whether American trade deal and visa hike are the real reasons for the decline in the stock market? It would not be wrong to say that both these are the major reasons for the decline in the stock market. But even more factor that put pressure on Sensex and Nifty is working. In which the most important foreign investors are constant migration from the stock market. On the other hand, in the currency market, the rupee is constantly being seen on the Ret Cord Low against the dollar.
Pressure is being seen in IT shares. Due to the GST reform, the investors have started profit booking after the rise in the auto stocks. The rise in dollar and increase in crude oil prices are all the reasons whose impact is being seen in India’s stock market. Let us also try to explain to you in the language of the figures how the stock market appeared to be changing in the first and second half of September.
How did the mood swings of the stock market happen in September?
Effect of GST first
In September, the stock market can be distributed comfortably in two parts. In the first half, where the stock market was giving investors a chance to be happy. On the other hand, in the second half, the market once again immersed investors into the Sagar. Let’s start with Happy Phase. The GST Council meeting started on 3 September. In which everyone was expected to reduce the tax slab. This was the reason that the momentum of the stock market had started becoming.
On September 2, the Sensex was closed at 80,157.88 points and after the announcement of GST meeting and reform, the Sensex jumped 3.56 percent in just 15 days. By September 18, the Sensex had reached the level of 83,013.96 points, that is, there was a rise of 2,856.08 points. Some similar figures were also seen by Nifty. On September 2, the Nifty was at 24,579.60 points, which rose 844 points or 3.43 per cent to 25,423.60 points on September 18.
Trump’s statements also contributed to this fast, when he expressed his desire to come close to India and Modi and meet him. Then it started to feel that soon all the distance between the two countries will disappear and India will end V tariff. Also there will be a better trade deal.
Trump showed his attitude again
Till September 18, it seemed that the stock market would enjoy investors in September. But on September 21, the US President gave such a statement that no one knew. Trump increased the US H1B visa fee to more than Rs 1 lakh, or more than 88 lakh rupees. After this increase, the cost of tech companies working in America or those American companies working in America will increase the jobs of people of India. 70 percent of this visa is used from India all over the world.
On Monday, when the market opened, the impact of this order was seen in a tremendous manner in the stock market. By the way, there was a slight decline in the stock market on Friday. Talking about the figures, the concentration was at 83,013.96 points on 18 September. Which came to 81,715.63 points by 24 September. This means that since then the Sensex has seen a decline of 1,298.33 points i.e. 1.56 percent.
On the other hand, if we talk about the National Stock Exchange, then it has also seen a very bad fate. On September 18, where the Nifty was seen on 25,423.60 points. On September 24, after a decline of day, on 24 September, 25,056.90 points came. This means that the Nifty has seen a decline of 366.7 points i.e. 1.44 percent.
Major reasons for decline in stock market
- Visa fee hike: The impact of H1B visa charge hike of American President is clearly seen in the stock market. Many companies of India are providing IT service in America. Where many Indians also work. In such a situation, the impact of visa hike is clearly seen on companies and improids.
- US tariff: The impact of tariff on India has not reduced in the stock market. After the visa fee hike, the dynamic of the conversation between the two countries will also change. Where India will have to retreat on some fronts, then America will also have to bow down in some places. At the moment, this trade deal seems to be difficult. America has imposed a 50 percent tariff on India.
- Decline in IT stock: The effect of both the initiative trade deal and visa hike is clearly seen in India’s IT companies. Shares of big IT companies of the country are constantly getting profitable. The shares of companies like TCS to Infosys, Wipro, Tech Mahindra, HCL Tech etc. are seeing a decline. After the visa hike, the cost of these companies will increase significantly.
- Profit recovery in stock market: After the GST reform, the manner in which the stock market had seen a boom. After that investors have started making profits from the stock market. There is also a reason for that. Globally trade and geo political tension are constantly being seen. Europe is also seen in its grip. Sometimes the stock market can collapse with global decisions.
- Rupee on record low: On the other hand, the rupee has also come to the record lower level in the dollar. The rupee, which is closed at 88.75, may soon cross the 89 and 90 levels. In the current year, there has been a decline of more than 5 percent in the rupee against the rupee. Due to which its effect is also being seen in the stock market.
- Dollar rise: On the other hand, even though the dollar has seen a big decline in the current year. But in recent times, the dollar index has come in a better position. In the last 5 business days, there has been an increase of 0.50 percent and 0.70 percent in 3 months and is doing business close to 98 levels.
- Increase in crude oil: On the other hand, crude oil prices have seen a rise in the international market. The reason for this is tension in the middle East. Middle East is beginning to feel a threat from Israel. A few days ago, UAE also warned of this. In such a situation, Brent is once again seen close to $ 70 per barrel. Whereas a few weeks ago, Brent’s price came down from $ 66 per barrel.
- Withdrawal of foreign investors: At the same time, one of the most important reasons is the migration of foreign investors from the stock market. In which there is no shortage to see. If we look at the NSDL data, in the month of September, foreign investors have withdrawn Rs 11,582 crore from the stock market. Whereas in the current year, this figure has reached Rs 1,42,217 crore.
How much loss to investors in four days?
If we talk about the loss of stock market investors, then it has been enough in four days. On September 18, the market cap of BSE was Rs 4,65,73,486.22 crore. Which came down to Rs 4,60,56,946.88 crore on September 24. This means that in these four days, investors have lost Rs 5,16,539.34 crore. Whereas after the GST reform, investors had benefited by Rs 12 lakh crore.