Why is India stock market down today? Explained with 5 reasons

Stock market crash today

In the last two sessions, the Nifty 50  index has crashed over 400 points, the BSE Sensex has lost over 1300 points whereas the Bank Nifty index has nosedived over 1,000 points. In the broad market, the small-cap index has crashed over 2 percent whereas the mid-cap index has lost to the tune of 1.50 percent since Friday last week.

Why share market is down today?

On why the Indian stock market is down today, Avinash Gorakshkar, Head of Research at Profitmart Securities said, “Escalating tension in the Middle East due to the Israel-Iran war is the major reason for the fall in the Indian markets. However, there are some other reasons like rising US dollar and Treasury yields, FIIs selling, falling Indian National Rupee (INR), and rising crude oil prices that have fueled the selling pressure in the Indian stock market.”

Experts listed out the following the following 5 major reasons for fall in the Indian stock market:

1] Iran-Israel war: “Tension in the Middle East is the major reason for selling in the Indian equity market as this has put doubts regarding the geo-political uncertainty in the region,” said Avinash Gorakshkar.

2] Weal global market: “After escalation in the Middle East, selling has taken place across the global bourses. The US stock market ended lower on Friday. In the early morning session on Monday, major Asian markets like Nikkei, Hang Seng, Kospi, etc., are trading under pressure,” said Sandeep Pandey, Founder of Basav Capital.

3] Rise in US dollar rates: “US dollar is  continuously rising and the US dollar index has come close to 106 levels and the US dollar rate has touched 34-year high against the Japanese Yen. This has spurt the US Treasury yields that has spurt selling in global equity market, which includes the Indian stock market,” said Avinash Gorakshkar of Profitmart Securities.

4] Soaring crude oil prices: “Crude oil prices have surged to the six-month high in domestic and international markets. The fuel prices have risen to the tune of 6 percent in March 2024 whereas, in April 2024, it has surged more than 3 percent till date,” said Anuj Gupta, Head of Commodities & Currency at HDFC Securities.

“Soaring crude oil prices are not a good sign for the global economy as it is expected to put pressure on the local currency and inflation,” said Sandeep Pandey of Basav Capital.

5] FIIs’ selling: “Due to the geopolitical uncertainty and rising US dollar rates, FIIs are fishing out money from the Indian stock market. On Friday, they sold out Indian stocks worth ₹8,027 crore in the cash segment whereas they sold out around ₹2,000 worth of shares in the F&O segment,” said Avinash Gorakshkar. 

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.

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Published: 15 Apr 2024, 09:43 AM IST