sensex nifty stock market fall
Sensex Nifty Stock
Market Fall
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Overview of the Stock Market Fall: Sensex and Nifty
The BSE Sensex and NSE Nifty indices, in particular, have shown a notable decline in the Indian stock market in recent years. By January 13, 2025, the Sensex had plummeted more than 1,000 points, and the Nifty had dropped about 346 points. The Nifty reached its lowest level in seven months as a result, continuing a downward trend that had continued for four sessions in a row.
Reasons Behind the Decline
1. Global
Economic Factors:
The state of the world economy was the main cause of the
selloff. Expectations of an early Federal Reserve interest rate cut were
dampened by a better-than-expected US jobs report on January 12 that showed
strong job growth. This news put pressure on emerging markets like India by
raising US bond yields and strengthening the dollar.
2. Crude Oil Prices:
At the same time, new US sanctions on Russian oil caused
crude oil prices to soar to their highest levels in 15 weeks. Rising oil prices
specifically impact economies like India that depend on oil imports and add to
inflationary pressures worldwide.
3. Domestic
Economic Concerns:
Several factors fueled unfavourable sentiment at home,
including:
The value of the Indian rupee plummeted to a record low of Rs 86.59 against the
US dollar.
Indicating rising borrowing costs, the yield on 10-year
government bonds increased by 7 basis points to 6.85%.
Foreign portfolio investors (FPIs) exerted persistent selling pressure, net
selling about Rs 4,900 crore worth of Indian stocks on this one day alone.
4. Market Sentiment and Technical Indicators:
Analysts
noted that technical indicators showed a decisive downside breakout from key
support levels for both indices. The immediate support level for Nifty was
breached at around 23,260 points, with expectations that it could slide further
down to levels between 22,800 and 22,700.
5. Sectoral Performance:
All sectoral indices within Nifty were trading negatively
during this period. Notably affected sectors included banking and financial
services as well as IT stocks which saw significant losses.
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Future
Outlook
Because of these domestic and international pressures,
market analysts anticipate more volatility shortly. Important
forthcoming events that are anticipated to have a major impact on market
direction include the announcement of the Union Budget and corporate earnings
reports.
In conclusion, several factors contributed to the decline of the Sensex and
Nifty, including strong global economic data that decreased expectations of a rate
cut by the US Federal Reserve, rising crude oil prices that affected domestic
inflation concerns, declining currency values relative to the dollar,
persistent FPI selling pressure, and negative technical indicators that
indicated additional downside risks.
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