Business News Desk -The stock market continued to decline for the fifth consecutive day on Friday, December 20. With this, Nifty has now fallen by about 10 percent from its recent all-time high. The Sensex fell nearly 1,300 points below the day’s high today. Even most of the sectoral indices remained in the red, indicating an all-round decline in the market. The worst performer was the Nifty IT index, which fell more than 2 per cent despite good results from Accenture. At around 2:30 pm, the Sensex was trading at 78,320, down 895 points or 1.13 percent. At the same time, Nifty was at 23,680 with a decline of 271 points or 1.2 percent. Let us know what were the main reasons behind this decline-
1. FII selling
Ajit Mishra, senior at Religare Broking, said, “The biggest reason for today’s fall in the market should be considered to be the sharp selling by FIIs.” FIIs have made a net sale of about Rs 12,230 crore so far this week. Out of this, he sold shares worth Rs 4,224.92 crore on Thursday, December 19. This indiscriminate selling by FIIs is reminiscent of October, when they sold shares worth about Rs 1 lakh crore.
2. Change in the stance of the Federal Reserve
Ajit Mishra said that the US Federal Reserve has indicated to adopt a tough stance on monetary policy during 2025, which has further worsened the market mood. Mishra said the market was expecting three to four cuts in interest rates during the next financial year. But now we don’t even know whether rates will be cut twice next year or not.
3. Profit booking
Market experts are also considering huge profit booking as the reason behind the decline in the stock market. He said that after the policy announcements of the Federal Reserve, investors are not seeing clarity in the market movements. In such a situation, they are booking profits while being cautious. Nifty Midcap and Smallcap indices also fell by 2 percent today. Ajit Mishra said that the valuation of many counters in these segments is still high. In such a situation, investors should be more selective while investing and should choose the bottom-up approach. He said that they should choose such stocks where valuations are reasonable and revenue visibility is visible.
4. Rupee at historic low against dollar
There is clear pressure on the Indian rupee in the foreign exchange market. The Indian rupee fell to a historic low of 85.1050 against the US dollar on Friday. So far this year, the rupee has fallen by about 2 percent against the dollar. The economic sentiment has also deteriorated due to increase in trade deficit in November.
