Share market: The decline in the share price will continue till this week. Know the reasons for this downfall. Share market: Due to the ongoing Iran-Israel conflict in Gaza causing tension in the Middle-East region, along with the increase in US dollar rates and US Treasury yield, as well as FIIs’ selling, the Indian stock market continued its downward trend for the third consecutive session on Tuesday.
Share market today
The Nifty 50 index started the day lower at 22,125 and dropped to an intraday low of 22,103. It resulted in a loss of approximately 650 points over the past three sessions. The BSE Sensex also opened lower today at 72,892. It reached an intraday low of 72,814. It marks a decline of around 2,184 points in the recent sessions. Similarly, the Bank Nifty commenced trading at 47,436. It quickly fell to today’s low of 47,316 shortly after the market opened. It reflects a crash of 2,670 points since last week’s Thursday closing.
Reasons of decline in stock market price
These are the major reasons of decline in the stock market price;
1] The primary cause for the decline in the Indian equity market is the heightened tension in the Middle East. It has raised concerns about geopolitical uncertainty in the region, according to Avinash Gorakshkar.
2] Following the escalation in the Middle East, global stock exchanges have experienced a decline. The US stock market concluded with a decrease on Friday. The major Asian markets such as Nikkei, Hang Seng, and Kospi are currently facing downward pressure in the early morning session on Monday, as stated by Sandeep Pandey, Founder of Basav Capital.
3] The continuous rise of the US dollar: The US dollar index is nearing 106 levels. It is reaching a 34-year high against the Japanese Yen. It has led to an increase in US Treasury yields. This surge in yields has resulted in selling across the global equity market. It includes the Indian stock market, according to Avinash Gorakshkar from Profitmart Securities.
4] Crude oil prices have reached a six-month high in both domestic and international markets. The fuel prices saw a 6 percent increase in March 2024. It surged over 3 percent in April 2024, according to Anuj Gupta, Head of Commodities & Currency at HDFC Securities. Soaring crude oil prices could have negative implications for the global economy. It will potentially impact local currency and inflation.
5] The disappointing US retail sales figures have caused concern in the market due to their unexpected strength. This has led to speculation that US spending remains robust. It is potentially fueling inflation. Consequently, there are fears that these disappointing retail sales numbers could hinder the possibility of a US Fed rate cut in the near future. As a result, there has been an increase in US dollar rates and US Treasury yields, with equity investors shifting their focus towards these assets, as explained by Avinash Gorakshka.
