A huge fall is being seen in the Indian stock markets on Monday (8 December), the first trading day of the week. By the time the news was written, the Sensex had fallen by 800 points, while the Nifty had come down to 25,900. A major reason for the fall in the market is the caution of investors before the US Federal Reserve meeting. Continuous FII selling, weak rupee, rising crude oil prices and rise in India VIX also put heavy pressure on the market sentiment. Let’s take a look at the five big reasons behind this stock market decline.
1. Caution before US Fed meeting
Investors are cautious ahead of a two-day meeting of the US Federal Reserve, which starts on December 9. Inflation data and year-end portfolio adjustments also contributed to sentiment. Other central banks will also hold meetings this week, but no major changes are expected.
2. Continuous FII selling
Foreign institutional investors (FIIs) continued selling for the seventh consecutive trading day on Friday. Foreign investors sold shares worth about Rs 439 crore on Friday. After a strong rally, valuations had become expensive, increasing the possibility of a market decline.
3. Weakness in Indian Rupee
The rupee fell 16 paise to 90.11 against the dollar. The pressure increased due to rising crude oil prices and selling by foreign institutional investors. Dollar demand from importers and corporates also weakened the rupee.
4. Rise in crude oil prices
Brent crude reached $63.83 per barrel. Higher oil prices raise concerns about India’s import bill, adding to market jitters.
5. Rise in India VIX
India VIX, a volatility index, rose more than 2 percent to 10.53. A rise in the VIX indicates increasing uncertainty in the market, causing traders to avoid taking risks.