Why Share market is down today?: The Indian stock markets saw a sharp decline for the second consecutive day on 25 July. The weak quarterly results of the companies, the selling of foreign investors and the weak signals from global markets have weakened the morale of investors. During the trading, the Sensex was trading at around 670.05 points or 0.82% to 81,514.12. At the same time, the Nifty fell 219.55 points or 0.88% to 24,842.55. The Sensex has broken more than 1,200 points in the last two days. The Nifty has now slipped below 24,850.
Shares of veteran companies like Bajaj Finance, Bajaj Finserv, Hero MotoCorp, Shriram Finance and Bajaj Auto fell on Nifty to 6% today. There were 7 major reasons behind this decline in the stock market-
1. Bajaj Finance’s weak quarterly results
Bajaj Finance shares fell to 6% during trading today. This falls after the decline is announced by the company’s June quarter results. Although the company’s consolidated net profit increased by 22% to ₹ 4,765 crore in the June quarter, tension is being seen in its MSME portfolio. Apart from this, Bajaj Finance has also been affected due to increase in credit costs in two -wheeler/Tiphia and MSME segment in the June quarter.
2. India Vix boom
The India Volty Index, which indicated the fear and nervousness in the stock market investors, a rapid jump of 7 per cent on Friday and reached 11.43 points. This index states that investors are expecting heavy market fluctuations right now.
3. Weakness in Indian rupee
The Indian rupee broke 19 paise to 86.59 on Friday against the US dollar. Domestic currency remains under pressure due to withdrawal of foreign capital and weakness in equity market.
4. FII continuously selling
Foreign institutional investors (FIIs) on Thursday sold a net selling of Rs 2,133.69 crore in the Indian stock market. In the last four business days, foreign investors have made a net withdrawal of about Rs 11,572 crore from the Indian market, which has spoiled the market’s sentiment. “The market situation looks weak in the near future,” said VK Vijaykumar, Chief Investment Strategist of Geojit Financial Services.
5. Weak signs from global markets
All Asian markets were also trading on a decline on Friday morning before the Indian stock market opened. Japan’s Nikkei, Shanghai Composite and Hong Kong’s Hangseng were all in red mark. The US stock market also shut down with mixed indications last night, increasing uncertainty in the global market.
6. Crude oil prices rise
In the international market, the price of Brent crude oil rose 0.39% to $ 69.45 per barrel on Friday. Increasing oil prices increase the risk of inflation for large importer countries like India, which can affect the sentiments of investors.
7. India-US trade deal delayed
Another major reason behind the recent decline in the stock market is the delay in the announcement of the trade deal between India and America. Both countries have been talking on this deal for a long time, but have not received some clear indications of the final of this deal yet. The US recently announced a trade deal with several Asian countries including Japan, Philippines, Indonesia and Vietnam. But in the case of India, uncertainty remains intact, which is affecting the sentiments of investors.
What do experts say?
Anand James, the Chief Investment Strategist, the Chief Investment Strategist of Geojit Financial Services, reported that if the Nifty goes below 24,900, it may further increase the pressure on it. He said, “The level of 25,215 has triggered a kind of consolidation, which is now anticipating converting into a deep downtrend. If the support level of 24,900 breaks down, the next immediate support can be between 24,750–24,650. It may be between 24,750–24,650. It can also feature up to 24,450 and then even 24,000.”
However, James also added that if the Nifty sets near 24,900, the market may show the sideways movement for some time. During this time, resistance can be seen around 25,130.
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