Indian Stock Market Crash The Indian financial markets crashed on Monday. Evidently with both the benchmark indices Sensex and Nifty 50 fell over a percent each amid heavy selling across the board.
While the Sensex dropped over 1,100 points, Nifty 50 slipped below the 23,700 level. Broader markets also reeled under selling pressure as the Nifty Midcap 100 and Nifty Smallcap 100 indices declined over 27% each
A widespread sell-off, across mid and small-cap stocks as well as in various sectors happened. The Nifty Bank index was down 1.81 per cent to 50,066. Only Nifty IT index was in the green, up a meager 0.13 per cent
Today’s stock market crash wiped out nearly Rs 9 lakh crore from investors’ pockets. The market capitalization of BSE-listed companies stood at Rs 44,245,584.96 crore. This figure is down by nearly Rs 9 lakh crore from Friday’s market capitalization of Rs 45,133,848.87 crore.
The following are the primary reasons leading to the stock market crash in the Indian financial market today.
- Virus Outbreak-: A case of Human Metapneumovirus (HMPV), responsible for spike in respiratory illnesses. Earlier detected in China, has been detected in Bengaluru. According to news reports, an eight-month-old child in Bengaluru tested positive for HMPV
The Virus can cause respiratory disease in people of all ages, especially among young children, older adults, and people with weakened immune systems.
- Weak Asian Markets-: Most Asian markets traded lower as sentiment remained cautious over the potential changes by the US President-elect Donald Trump. The President has vowed to sharply raise tariffs on imports from China and other countries, potentially denting growth for a region heavily reliant on trade.
Japan’s Nikkei 225 index lost 1.5%, while the Hang Seng in Hong Kong declined 0.3%. The Shanghai Composite index dropped 0.2%.
- US Dollar-: A gauge of Asian currencies hit its lowest in almost two decades against the dollar and equities fluctuated, with gains from buoyant chip sector countered by declines in Japanese stocks. The dollar traded near a two-year peak on Monday.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading around 108.74. The US dollar rose to 157.77 Japanese yen from 157.22 yen. The euro cost $1.0316, up from $1.0306.
- Technicals-: Nifty 50 has broken its key support levels, which has intensified selling pressure. “Nifty 50 has a good view if it stays above its 200 DMA which is placed at 23,900. While inter month perspective Nifty direction will depend on what Donald Trump will do after he takes office as US President on January 20th, 2025.
Considering both events upside on Nifty is likely to be capped. Technically, the landscape suggests Nifty’s major support at 23,905 / 23,727 mark. Intermonth support seen at 23,000 mark.
