Following the uncertainty before the commencement of the US Fed meeting this month, the Indian stock market extended its losing streak for the third straight session on Friday. In early morning deals, the Nifty 50 index opened downside at 25,093 and touched an intraday low of 24,879, losing around 400 points. In this selling pressure, the 50-stock index also lost the crucial base of 25,000.
Today, the BSE Sensex opened with a downside gap at 82,171 and touched an intraday low of 81,304, logging an intraday loss of 867 points within a few minutes of the stock market’s opening bell. While touching this intraday low, the 30-stock index logged around 1,250 points in the last three successive sessions.
Why is India share market falling?
According to stock market experts, this continuous fall in the Indian share market can be attributed to two major reasons: uncertainty before the US Fed meeting and overbought conditions on Dalal Street. They said that the bounce back in the US dollar rates after a revision in the US inflation average, weak US job data and flat US jobless claim data have further contributed to this loss in the Indian stock market for the last three straight sessions.
Here we list out the top five reasons that are dragging the Indian stock market:
1] US Fed meeting: “Major reason for the market fall in uncertainty over the interest rate cut announcement in the fast approaching US Fed meeting this month. If the US Fed declares a 25 bps rate cut, then the market may not cheer the US Fed’s rate cut announcement, whereas 50 bps or above may inject extra fuel into the markets across the globe. So, those who don’t want to take any risk are offloading their long positions and insulating themselves from any hiccups post-US Fed meeting,” said Avinash Gorakshkar, Head of Research at Profitmart Securities.
2] Overbought condition: “Before the sell-off trigger in the Indian stock market on Wednesday this week, the market had rallied for 14 days. So, the Indian stock market was overbought, and current selling should be taken as a mere profit-booking only,” said Seema Srivastava, Senior Equity Research Analyst at SMC Global Securities.
3] Rebound in US dollar rates: “After revision in the US Inflation average last week, the US dollar witnessed some value buying on Wednesday last week, which helped the US dollar index to bounce back after touching 7-month lower levels, which is close to 100 mark. US dollar index is currently near the 101 mark, which means the US dollar index has gained around one per cent in the last three straight sessions, fueling demand in the forex and the treasuries and bonds,” said Anuj Gupta, Head of Commodities & Currencies at HDFC Securities.
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