Stock Market Crash: Why Sensex Falls Over 1,000 Points Today, Nifty Below 24,400? News 18

Stock market crash: With global uncertainty and domestic factors such as a weak rupee and FII outflows continuing, markets are likely to remain volatile in the near term.

Stock Market Crash: The Sensex and Nifty saw sharp declines of over 1 percent on December 17 as investor sentiment turned cautious ahead of the US Federal Reserve’s interest rate decision on Wednesday. Heavy selling pressure in financials, metals, FMCG, and IT shares along with weak global cues and rupee depreciation added to the market woes.

gave BSE Sensex It sank 1,015.64 points, or 1.2 percent, to hit an intraday low of 80,732.93, while the NSE Nifty lost 284 points to fall below the 24,400 mark during the session.

According to Money controlSeveral key factors, including global economic uncertainty, commodity price volatility, and fears of central banks raising interest rates, have contributed to today’s major market crash, with investors reacting to a combination of domestic and international pressures. has shown a reaction which has led to a massive sell-off. – Reduction in major indexes.

Key Factors Driving Today’s Stock Market Crash

1. US Fed Jitters

Investors are keeping a close eye on the US Federal Reserve’s interest rate decision due on Wednesday. Markets have already priced in a rate cut of 25 basis points, but investors will focus on Fed Chair Jerome Powell’s comments on future rate guidance.

“Any departure from a dosh commentary will be negative for markets,” said VK Vijaykumar, chief investment strategist at Geojit Financial Services.

2. Rupee is at an all time low.

The Indian rupee hit a new lifetime low of 84.92 against the US dollar on December 17, driven by foreign fund outflows and weaker domestic equities.

Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP noted, “The rupee fell in NDF (non-deliverable forward) markets after November’s record trade deficit, mainly due to increased gold buying. “

3. Lack of fresh FII purchases

Absence of fresh buying by foreign institutional investors (FIIs) further dampened sentiment. FIIs stepped up their cautious stance by offloading equity worth Rs 279 crore on Monday.

“FIIs seem to have continued their selling today, as mid-cap and small-cap indices are still holding ground,” commented Ajit Mishra, Senior Vice President – Research at Religare Broking.

4. Sell in Blue Chip Stocks

Heavy selling in index heavyweights dragged down the broader markets. Stocks like Reliance Industries, Bharti Airtel, Nestlé, Larsen & Toubro, Bajaj Finsro, HDFC Bank, JSW Steel, and Titan were major underdogs among the 30-share Sensex pack.

5. Bank of Japan Policy Mate signals caution.

Investors are also awaiting the outcome of the Bank of Japan’s (BOJ) last policy meeting for the year, scheduled for December 18-19. The BOJ is expected to consider raising short-term interest rates from the current 0.25 percent.

The BOJ’s decision follows the Fed’s findings, which markets expect will include a rate cut.

Global Markets in Focus

Global markets remained under pressure, which contributed to weakness in Indian shares. Elsewhere in Asia, Seoul, Shanghai, and Hong Kong traded lower, while Tokyo managed to stay in positive territory. On Wall Street, indices closed mostly higher on Monday.

“It is important for the BOJ to hold off on raising rates until the economy recovers a bit more,” Reuters quoted a senior Japanese government official as saying.

Outlook: Cautious sentiment to continue

Siddhartha Khemka, head of wealth management – ​​research at Motilal Oswal Financial Services Ltd said, “We expect markets to remain firm within a broad range as sentiment ahead of interest rate decisions by the US Fed and the Bank of Japan. Be careful.”

With global uncertainty and domestic factors such as a weak rupee and FII outflows continuing, markets are likely to remain volatile in the near term.