Why is the Indian stock market declining for 5 consecutive sessions? — 5 important reasons explained

Why is the stock market falling?

Regarding the reasons that are holding back the Indian stock market, Saurabh Jain, vice president of research at SMC Global Securities, said, “There are a combination of reasons that are holding back Indian indexes.The current lock sabha polls, continued selling by FIIs, an unimpressive fourth-quarter earnings season, a hawkish US Fed and a rally in the VIX India index are the main factors weighing down the Indian stock market in recent days. This is thought to be one of the reasons.

Also read: Gold prices fell ahead of the hawkish US Fed’s Akshaya Tritiya. Opportunity to buy?

Why is the stock market falling today? Top 5 reasons

1]Lok Sabha elections: “Indian stock markets are already discounting the victory of the BJP-led NDA in the ongoing Indian Assembly polls.Currently, Indian stocks are in an overbought condition, leading to premature profit-taking on Dalal Street. However, there is a sell-off in the market.”Profit Mart said, “We are seeing a sell-off across the market as small-cap and mid-cap indexes surged and outperformed the frontline index on Thursday.” said Avinash Gorakshkar, head of research at Securities. A balanced view of the situation.

2]FII Sales: “FIIs have been selling heavily this month as they have been net sellers in all sessions in May 2024. They have sold out a significant amount of Indian stocks.” INR1,586.3 billion in cash segment till Thursday while FIIs sell off significant stakes. INR5,292 million in the Futures & Options (F&O) sector,” said Avinash Gorakshkar of Profit Mart Securities.

3]Hawkish US Fed: “Hawkish comments from some US Fed officials have put further pressure on Indian stocks in recent days. These comments have allowed the US dollar to rebound after profit taking was confirmed earlier this month. “Rising US dollar prices are also pushing up US bond yields,” said Saurabh Jain, SMC Global Securities. Ta.

4]Results for Q4 2024 were not impressive: Saurabh Jain added that there is no surprise in the current fourth quarter results of the 2024 season. This also failed to induce additional purchases on Dalal Street. “Markets had already discounted Q4 2024 results ahead of quarterly earnings season, so now that earnings season is about to end next week, investors are locking in profits,” Saurabh Jain said.

5]Rising VIX index: “The continued rise in the VIX index has also raised doubts among new buyers who are hesitant to inject funds in the current volatile market.India’s VIX index has increased significantly during the Sabah elections. There is a history of uptick, and we are right in the middle of it.”For the 2024 general election, we expect volatility to further accelerate as we approach result day,” said Avinash Gorakshkar of Profit Mart Securities. said.

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or brokerages and not of Mint. Because market conditions can change rapidly and individual circumstances may vary, investors are strongly encouraged to consult a certified professional before making any investment decisions.

Milestone alert!
Livemint tops the charts as the world’s fastest growing news website 🌏 click here To know more.

Unlock a world of benefits! From insightful newsletters to real-time inventory tracking, breaking news and personalized newsfeeds, it’s all here, just a click away. Log in here!

Published: May 9, 2024, 11:14 AM IST