The Indian stock market saw a strong decline on Friday morning. The Nifty 50 started at a low of 22,433 and reached the lowest level of 22,224 in early trade.
The BSE Sensex also opened at a low of 74,201 and fell to 73,579, indicating a decline of more than 1000 points.
The bank Nifty index also opened at a low of 48,437 and fell to 48,161, indicating a fall of 1%.
IT, Tech, Auto and Telecom sector saw the best selling.
5 major reasons for decline in stock market
According to stock market experts, there are 5 major reasons behind this decline:
1. Rumor of weak earnings of Indian banks
Expert: Avinash Gorakshakar, Research Head of ProfitMart Securities
The fourth quarter earnings of Indian banks are rumored to be less than the market estimate.
30% of the strength of the Nifty 50 index comes from banking stocks, so when the banking sector is weak, it has a direct impact on the market.
Due to this rumor, there was heavy selling in the market on Friday.
2. Domestic investors stuck at high level
Expert: Avinash Gorakshakar
FIIs (foreign institutional investors) are constantly withdrawing money from the Indian market, but DII (domestic institutional investors) are not very active in the market.
DIIs have already invested at high levels and are currently waiting to rebel their positions.
Due to this, market fluctuations are being seen.
3. MSCI Rejig (Changes in Index)
Expert: Anshul Jain, Research Head of Laxmishree Investment and Securities
The MSCI index is going to change, which has increased uncertainty in the market.
This change may affect the trading volume.
Domestic and foreign investors are engaged in rebelling their positions, causing the market ups and downs.
4. US bond yield growth
Expert: Avinash Gorakshakar
FIIs are selling in the Indian stock market due to increase in American bond yields.
When the bond yield is high in the US, investors like to withdraw money from the Indian market and invest there.
This trend has intensified due to Donald Trump’s speculation of coming to power again in the US.
5. ‘Sale India, By China’ strategy
Expert: VK Vijaykumar, Chief Investment Strategist of Jeanched Financial Services
After Trump’s victory, China has become the new center of global portfolio investment.
Due to attractive valuation in China’s stock market, FIIs are investing money from India and investing in China.
Due to this, selling pressure in the Indian market is increasing.
