Why has Indian stock market been falling for five straight sessions? (2024)

Stock market today: The Indian stock market continued to see the sell-off heat for the fifth straight session on Thursday, May 9. The Nifty 50 index opened lower in the early morning session and ended 345 points, or 1.55% lower. The BSE Sensex also opened in the red and closed 1,062.22 points, or 1.45%, lower at 72,404.17. Today was the fifth straight session of fall for the benchmark indices.

The Nifty Bank index has been under selling pressure for the last seven straight sessions, losing 1900 points. According to the astute observations of our esteemed stock market experts, the ongoing Lok Sabha elections, FIIs' selling, bounce back in the US dollar rates, hawkish US Fed fueling treasury yields, unimpressive Q4 results 2024 season and rising India VIX Index are some of the primary reasons that have been dragging the Indian stock market downwards.

Also read: Sensex crashes over 1,000 points lower, Nifty 50 settles below 22,000

Why is the stock market falling?

Speaking on the reasons for the drag on the Indian stock markets, Saurabh Jain, Vice President of research at SMC Global Securities, said, "There are combinations of reasons that are dragging Indian indices together. Ongoing Lok Sabha polls, continuous selling by FIIs, not so impressive Q4 results season, hawkish US Fed and rising VIX India Index can be attributed as one of the major reasons weighing on the Indian stock market these days."

Also Read: Gold price dips ahead of Akshaya Tritiya on hawkish US Fed. Opportunity to buy?

Why share market fell today? Top 5 reasons

1] Lok Sabha elections: "The Indian stock market has already discounted the victory of BJP-led NDA in the ongoing Lok Sabha polls. Now, the Indian stocks are in overbought condition and hence premature profit booking has triggered on Dalal Street. But, the selling is visible in the frontline large-cap stocks only. We are seeing bottom fishing in the broad market as the small-cap and mid-cap indices shot up on Thursday and outshined the frontline indices," said Avinash Gorakshkar, Head of Research at Profitmart Securities, providing a balanced view of the situation.

2] FIIs' selling: "FIIs are selling heavily this month as they have remained net sellers on all sessions in May 2024. They have sold out Indian shares worth 15,863 crore in the cash segment till Thursday while the FIIs have sold out shares worth 5,292 crore in the Future & Option (F&O) segment," said Avinash Gorakshkar of Profitmart Securities.

3] Hawkish US Fed: "Hawkish talks by some US Fed officials recently have put extra pressure on the Indian stocks. After witnessing some profit booking early this month, such statements enabled the US dollar rate to rebound. Rising US dollar prices have fueled the US Treasury yield as well. So, investors are expected to switch money from equity and other assets to currency and treasury markets," said Saurabh Jain of SMC Global Securities.

4] Non-impressive Q4 results 2024: Saurabh Jain added that the current Q4 results for the 2024 season have gone without any surprise. This also failed to trigger extra buying on Dalal Street. "As the market had already discounted the Q4 results 2024 ahead of the quarterly results season, investors are booking profit now as the season is about to end next week," said Saurabh Jain.

5] Rising VIX Index: "The continuous rise in the VIX Index has also put doubt among the fresh buyers, who are shy of pumping money in the current volatile market. As India VIX Index has a history of climbing during Lok Sabha elections and we are just in the middle of general elections 2024, the volatility is expected to pick up further as we come close to the poll results date," said Avinash Gorakshkar of Profitmart Securities.

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, and not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circ*mstances may vary.

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Published: 09 May 2024, 11:14 AM IST

Why has Indian stock market been falling for five straight sessions? (2024)

FAQs

Why has Indian stock market been falling for five straight sessions? ›

According to the astute observations of our esteemed stock market experts, the ongoing Lok Sabha elections, FIIs' selling, bounce back in the US dollar rates, hawkish US Fed fueling treasury yields, unimpressive Q4 results 2024 season and rising India VIX Index are some of the primary reasons that have been dragging ...

Why are it stocks in India falling? ›

The Indian IT sector has been struggling for over a year due to weak discretionary demand from clients from the key US and European markets amid elevated interest rates. The recent March quarter earnings and cautious growth guidance by some of the large IT players have failed to dispel the gloom from the sector.

Why Indian stock market is inefficient? ›

The study undertaken in this paper has provided strong evidence in favor of the inefficient form of the Indian Stock Market. The series of stock indices in the Indian Stock Market are found to be biased random time series and the random walk model can't be applied in the Indian Stock Market.

Why has the market crashed? ›

Stock market crash: Rising volatility in the market can be attributed to two major reasons — uncertainty due to ongoing Lok Sabha elections and the India VIX Index rising 70% in one month.

Why is Indian market falling so much? ›

According to the astute observations of our esteemed stock market experts, the ongoing Lok Sabha elections, FIIs' selling, bounce back in the US dollar rates, hawkish US Fed fueling treasury yields, unimpressive Q4 results 2024 season and rising India VIX Index are some of the primary reasons that have been dragging ...

What is the main problem of Indian market? ›

The problems faced by the Indian capital market are as follows: Inadequate disclosure of information. Price manipulation. Insider trading.

Is it good to invest in the Indian stock market? ›

When it comes to growth, the Indian stock market continues to be a prominent part of the global conversation. That's because by any measure you choose – whether it's the number of people who are investing, national economic expansion, or the value of leading publicly traded companies – India has impressive numbers.

Do you lose all your money if the stock market crashes? ›

While it appears that you're losing money during a market crash, in reality, it's just your stocks losing value. For example, say you buy 10 shares of a stock priced at $100 per share, so your total account balance is $1,000. If that stock price drops to $80 per share, those shares are now only worth $800.

Why are Tata Motors falling? ›

Synopsis. Shares of auto major Tata Motors on Monday fell up to 9% to the day's low at Rs 948 on BSE after three major global brokerages Goldman Sachs, Morgan Stanley and Nomura downgraded the Nifty stock while Citi suspended rating on Tata Motors following weaker outlook for FY25.

What were the 3 reasons that the market crashed? ›

In addition to the Federal Reserve's questionable policies and misguided banking practices, three primary reasons for the collapse of the stock market were international economic woes, poor income distribution, and the psychology of public confidence.

How many trading sessions in a day in India? ›

Pre-open Market: This session runs from 9:00 AM to 9:15 AM and lasts for 15 minutes. Orders may be placed, changed, or cancelled during this time. Regular Market: This session runs from 9:15 AM to 3:30 PM and begins just after the pre-open session. The primary trading session is when the majority of trade occurs.

What is the 3 30 formula? ›

The 3-30 rule in the stock market suggests that a stock's price tends to move in cycles, with the first 3 days after a major event often showing the most significant price change.

How many full time traders are there in India? ›

- The total number of unique individual traders in the equity F&O segment increased significantly from 7.1 lakhs in FY19 to 45.2 lakhs in FY22, a growth of over 500%. - Among these, 88% were active traders who traded more than 5 times a year, highlighting the growth in active participation.

What is the future of IT stocks in India? ›

Investing in Information Technology (IT) stocks in India offers compelling opportunities owing to the strong growth and global relevance of the sector. India's IT industry is known for its innovation, offering services in areas such as software development, artificial intelligence, and digital transformation.

Is IT good time to invest in IT sector in India? ›

Nifty IT index has given a return of 23 percent in the past one year but it is seen as overheated with a P/E ratio of 31.32 and P/B of 7.96. Experts point out that IT sector is set to underperform and is not a good buy at the current valuations.

Why is the tcs share price falling? ›

Before this, TCS shares took a beating earlier this week after holding company Tata Sons sold 2.34 crore shares of the IT firm in a block deal, valued at around Rs 9,000 crore. Following the stake sale, Tata Sons' stake in TCS has declined to 71.74 per cent from 72.38 per cent earlier.

Why is Infosys falling? ›

IT software services company Infosys witnessed a dip in its stock price by up to 2% in early trade, following its announcement of missing revenue estimates and offering more conservative guidance for the financial year 2025.

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