RBI’s repo rate cut, liquidity support of about ₹1.5 lakh crore to banks, and neutral stance, all these were the reasons due to which a rise in the stock market was expected on Monday, but it did not happen. Contrary to the sentiments of the common people, there was a huge fall in the stock market, due to which the wealth of common investors worth about ₹ 8 lakh crore was lost in a matter of hours. If we look at the data, Sensex fell by more than 800 points, while Nifty fell by more than 280 points.
According to experts, the sentiment worsened due to the fall in Indigo shares. On the other hand, the Fed meeting is to be held next week, where a cut of 25 basis points is expected, but the central banks of other countries may ban interest rate cuts. In this situation, investors are adopting a very cautious approach. Apart from this, weakening of rupee and increase in crude oil prices are also major reasons for the fall in the stock market. Let us see at what level Sensex and Nifty are trading.
Sensex and Nifty crash
A big fall was seen in the stock market on Monday. Bombay Stock Exchange’s benchmark index, Sensex, fell 805.47 points to 84,906.90. Sensex opened today at 85,624.84 points. On Friday, the Sensex closed at 85,712.37. At 2 pm, the Sensex was trading nearly 745 points lower at 84,969.11. On the other hand, the National Stock Exchange’s benchmark index, Nifty, was also trading significantly lower. During the trading session, Nifty fell almost 280 points to 25,922.10. Nifty opened at 26,159.80 points. By 2 pm, Nifty was trading 253.60 points down at 25,932.60.
Five reasons for the fall in the stock market:
Indigo’s troubles continue: Indigo’s crisis is not over yet. The government has sent a notice to IndiGo, and if no response is received then major action can be taken. IndiGo’s flight cancellations also continue, due to which IndiGo’s shares fell by 7 percent on Monday.
Caution before US Fed meeting: Investors are adopting a cautious approach ahead of the two-day Fed meeting, which begins on December 9. Devarsh Vakil, Head of Prime Research, HDFC Securities, said investors are remaining cautious ahead of the upcoming FOMC meeting, release of additional inflation data and year-end portfolio adjustment. He further said that the central banks of Australia, Brazil, Canada and Switzerland are also scheduled to meet this week, although apart from the Fed, no central bank is expected to make any policy changes.
Selling by foreign investors: Foreign institutional investors continued their selling, selling shares worth Rs 438.90 crore on Friday – the seventh consecutive session with net outflows. In December alone, foreign investors have pulled out more than Rs 11,000 crore.
Rupee weakening: Due to high crude oil prices and continuous outflow of foreign funds, the rupee weakened by 16 paise to 90.11 against the US dollar in early trade. According to foreign exchange dealers, the local currency opened at 90.07 but fell further due to strong demand for the dollar from corporates, importers and foreign portfolio investors.
Rising crude oil prices: In the international market, Brent crude from Gulf countries rose 0.13 percent to $63.83 per barrel. Higher crude oil prices put pressure on India’s import bill and raise inflation concerns, often creating a cautious mood in the stock market.
Loss of ₹8 lakh crore to investors
Investors have suffered huge losses due to this fall in the stock market. The extent of investors’ losses depends on the market capitalization of BSE. According to the data, when the stock market closed on Friday, the market capitalization of BSE was ₹4,70,96,826.75 crore. It fell to ₹4,63,01,207.86 crore during Monday’s trading session. This means that BSE’s market capitalization suffered a loss of ₹7,95,618.89 crore.