Share Market Crash:There was a huge decline in the Indian stock market on Monday. BSE Sensex fell 1048.90 points or -1.36% to close at 76,330.01, while Nifty 50 also fell 345.55 points or -1.47% to 23,085.95. Investors suffered a loss of Rs 14 lakh crore due to this fall. Only 4 out of 50 Nifty stocks closed with gains, while 46 stocks declined. There was no change in the price of 1 share. This all-rounder came in the marketThe decline has increased the concern of investors. Let us know the 7 big reasons for this market crash.
1. Strong US job data
Recently released US job data dashed the market’s expectations. In December, more than 2.56 lakh jobs were added in America, whereas the expectation was 1.65 lakh. This reduced the possibility of interest rate cuts by the US Federal Reserve. Due to no cut in interest rates, global investors may lose interest in emerging markets.
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2. Jump in bond yields
The 10-year Treasury bond yield reached an all-time high of 4.73% due to strong US economic data. Due to this the dollar strengthened and foreign investors started withdrawing capital from the Indian stock market. Due to increase in bond yields, there remains pressure on the equity market.
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3. Continuous selling by foreign investors
Foreign institutional investors (FIIs) have sold equity worth Rs 22,259 crore so far in January 2025. Due to the strength of the American economy and the strength of the dollar, investors are staying away from the Indian market. This selling became the main reason for the decline in the market.
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4. Increase in crude oil prices
Crude oil prices in the international market have reached the highest level in three months. Brent crude is trading at $ 81.11 per barrel and WTI crude at $ 77.97 per barrel. The rise in crude oil prices increases inflationary pressure on import-dependent countries like India.
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5. Rupee weakness
The rupee fell to its all-time low of 86.27 against the US dollar. Due to fall in rupee, foreign investors exit the Indian market, which leads to further decline in the market. Due to weakness of rupee, imports become expensive, which increases inflation.
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6. Signs of economic slowdown
According to the latest government data, India’s GDP growth is estimated to be 6.4% in the financial year 2024-25, which is less than 8.2% last year. This has weakened the confidence of investors. Economic slowdown has a negative impact on consumer spending, corporate earnings and investment.
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7. Weak earnings of companies
There has been a decline in the earnings of Indian companies in the last two quarters. Brokerage houses are estimating single digit growth in the earnings of companies in FY25. Weak earnings affect investor sentiment and lead to a market decline.
