We all have seen that for the last few months, the Indian stock market has been performing with instability. If we see, many stocks of good companies of India have given a very bad performance in a month. Big indices of Indian stock market like Bank Nifty, Nifty 50, Sensex have been seen falling badly. What is the reason for this decline? Why is the Indian stock market falling? What is the reason behind this? Let’s discuss this in this article and know what is the reason for this?
Why Is The Indian Stock Market Falling?
There can be many reasons for the stock market to fall down, such as political turmoil in the country, inflation, war, tension at the global level, negativity in the market, negativity among investors, etc., due to many such reasons, the stock market can be adversely affected.
If we talk about India, then in the last ten years, the Indian stock market is the best performing stock market in the world. If this is so, then why is there instability in this market now? This is a big question coming to everyone’s mind. Let’s understand this in a little more detail.
If we see, at the time of India’s election, the stock market was hitting all-time highs and it seems that it was trading at market prices. The second big reason is the war between Israel and Hamas and the entry of Iran in this war because India does a lot of trade with Iran and India’s petroleum also comes from Iran. In this war, Iran directly attacked Israel, due to which the Indian market was affected.
The Biggest Reason For The Market Crash
October 2024 was a record breaking month for the Indian market, but this month was in a negative way for Indian stocks. In October 2024, FIIs made net sales of Rs 114,445.89 crore in the Indian market. This is the highest selling done by FIIs in a month.
One of the main reasons for the exit of FIIs (Foreign Institution of Investors) is the possibility of higher returns from the Chinese market. China has recently taken a decision in which it has launched many incentives and new schemes and new measures including easing monetary policies and increasing government spending, aimed at improving its slowing economy and attracting global investors i.e. FIIs to invest back in its markets.
Examples of a Stock Fall
Let us talk about a company from which FIIs have withdrawn money and what is the condition of the company today. FIIs used to hold around 48% stake in IRB Infra company 4 months ago. If we look at the share holding pattern of this company today, FIIs now hold only 9% stake, which means global investors have shifted to the Chinese market after selling around 40% stake in this company.
IRB Infra’s share has fallen by around 24% in a month and the surprising thing is that the financial result of this company is good, and its share had hit an all-time high this year and today it has fallen by around 24%.
Bank Nifty, Nifty 50, Sensex
Bank Nifty: Bank Nifty had reached 54,400 in the month of October but within a few days it fell to 50,400 and is currently trading at around 52,000.
Nifty 50: Talking about Nifty 50, it has fallen by 800 points in the last one month.
Sensex: Sensex has fallen by about 1900 points in the last one month and is trading at rupees 79,800 today.
Conclusion
There are many reasons behind the decline in the Indian stock market, such as global political tensions, Israel-Hamas war, and large-scale withdrawal of FIIs. Due to the stimulus measures by China, FIIs withdrew money from the Indian market and invested in the Chinese markets. This has led to a decline in major indexes and companies.
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