Stock Market Crash
Due to global volatility, the Indian stock market has seen a big fall today. The Sensex was trading down 1,310.47 points or 1.62 per cent at around 79,670 and the Nifty was trading at 24,310, down 404.40 points or 1.64 per cent. Today 2368 shares declined while 154 shares remained unchanged.
Apollo Hospitals and Sun Pharma were the top gainers in the Nifty while shares of Maruti Suzuki, Tata Motors, Hindalco, Titan Company and Tata Steel were the biggest decliners. Let’s take a look at the major factors that led to the sharp fall in the stock market today.
1 Fear of America going into economic recession
Fears of the US going into economic recession have increased. Because the bearish Sahm Recession Indicator is seen above 0.5 points. This is a sign of possible recession. In the month of July, the recruitment of new jobs in the United States has decreased significantly.
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Only 1,14,000 new jobs were created during the period compared to last year’s monthly average of 2,15,000 jobs. Moreover, the unemployment rate has reached 4.3 percent, the highest since October 2021. As a result, the American market fell flat on Friday. It was the worst day since 2020 for the stock market.
2 Monetary Policy of the Bank of Japan
Not only are US markets bearish, but Japan’s Nikkei 225 is also struggling. The Bank of Japan raised its interest rate on Wednesday. This increase has further strengthened the value of the Japanese yen against the US dollar.
3 Iran-Israel tensions
Tensions are rising in the Middle East. Iran, Hamas and Hezbollah have vowed revenge for Israel’s killing of a Hamas chief and Hezbollah’s military chief. Conflict in the Middle East will increase oil prices. But oil prices are currently at an 8-month low due to lack of demand. Therefore, the price of crude oil is likely to rise due to this war.
4 first quarter results
According to Motilal Oswal, the results for the quarter ended June were weak due to lack of good deals among companies, heat wave and sluggish demand. Results so far in this period are down around 10% on an annualized basis.
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The 30 companies included in the Nifty 50 that have announced their results so far have seen their earnings grow by an average of 0.7 percent annually. But the profit fell by 9.4 percent quarter on quarter. Overall performance has been negatively affected by the global slowdown.
Major companies like HDFC Bank, Tata Motors, ICICI Bank, Maruti and TCS supported the overall performance of the Nifty 50.
5 Lack of new triggers
Now investors were looking to the results season, the budget and the US Federal Reserve to gauge the market’s future course. Once all these events are completed, the market has no new triggers that can add to the uptrend.
📉 Investors lose ₹9.51 lakh crore as markets dive#MarketCrash #InvestmentNews #FinancialImpacthttps://t.co/8BB93L3OIA
— Zee Business (@ZeeBusiness) August 5, 2024
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