Business News Desk – Today on December 17, there was a huge decline in the stock market for the second consecutive day. Sensex fell by about 1100 points in early trade. At the same time, Nifty fell by about 350 points and reached near 24,300. There was a decline everywhere in the market. Due to this, the market cap of BSE listed companies decreased by about Rs 3 lakh crore to Rs 457.08 lakh crore. Market experts say that on Wednesday i.e. December 18, the US central bank Federal Reserve will hold a meeting on interest rates. In view of this, investors adopted a cautious approach and booked profits. Let us know the 5 main reasons for today’s decline in the stock market-
1. US Federal Reserve meeting
The main reason for the fall in the stock market is the important two-day meeting of the US Federal Reserve starting today i.e. from December 17. The results of the meeting will come on December 18. The Federal Reserve Committee will decide on interest rates during this meeting. The stock market is assuming that after this meeting the Federal Reserve may announce a cut in interest rates by 0.25 percent. However, investors are more interested in the statement of Federal Reserve Chairman Jerome Powell. Jerome Powell will give hints about future monetary policy in his statement. Any unexpected move or statement by Powell could have a negative impact on global stock markets. Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said, ‘Global markets are currently waiting for comments from the US Federal Reserve. If the Federal Reserve adopts a less accommodative stance, it could hurt market sentiment. However, the chances of this happening are less.
2. India’s increasing trade deficit
India’s merchandise trade deficit reached its historic record high of $37.84 billion in November. Vijayakumar said, “India’s widening trade deficit is a big concern. The weakening of the rupee will benefit exporters like IT and pharma companies, but it will “The cost to importers will increase. Its effect is also visible on the share price.”
3. Mixed signals from global markets
Due to weak trend globally, investor sentiment remained weak in the stock market today. In Asian markets, South Korea’s Kospi, Japan’s Nikkei, China’s Shanghai Composite and Hong Kong’s Hang Seng were in loss. There was a downward trend in major markets of Europe in afternoon trading. At the same time, American markets remained in loss on Friday.
4. 6% jump in volatility index
India VIX, the volatility index indicating turmoil in the stock market, saw a huge jump today on December 17. The index jumped nearly 6 percent to 14.8 points. The surge in the volatility index indicates that investors are expecting more volatility in the stock market in the coming days.
5. Weak performance of heavyweight stocks
Major companies like Bharti Airtel, TCS, Reliance Industries and HDFC Bank, known as index heavyweights, witnessed losses in trading today. This fall dragged Sensex and Nifty further down. Except realty, all other sectoral indices also saw a decline today.
