Dalal Street is in flames as the Sensex plummets by 1,000 points. What caused the market to crash?
Tuesday’s end witnessed a huge carnage on the Indian financial markets, with the Sensex falling more than 1000 points and battling to hit its all-time high once again.
On January 23, the NSE Nifty was down 341 points at 3 pm to stand at 21,255, while the BSE Sensex had lost nearly 1000 points to close at 70,419.
This comes after the country observed the consecration ceremony of the Ram Lalla statue inside the recently built temple on Monday, January 22, with the markets remaining closed.
The BSE Sensex fell more than 1000 points as the Tuesday closing bell approached, reaching a one-month low of 70,419 points. Notably, the Sensex reached an all-time high of more than 73,000 in January 2023.
After seeing a huge surge earlier in the month, Nifty and Sensex have been having difficulty maintaining their current levels. Last week, both benchmark indices had three days of consecutive declines before making a modest comeback on Friday. Nonetheless, Tuesday saw a significant market drop for the five main causes that are stated below.
Five causes behind Tuesday’s Sensex and Nifty decline
The price of HDFC shares keeps falling.
HDFC Bank’s stock fell 3% on Tuesday, which was a major factor in the NSE Nifty and Nifty bank’s decline. A third of the current stock market slump may be attributed to the sharp decrease in the price of HDFC Bank shares alone.
RIL’s stock drops
The most valuable firm in India, Reliance Industries, witnessed a 2 percent decline in its shares today, sending the stock market into severe turbulence. Reliance, owned by Mukesh Ambani, turned out to be the second largest factor in the recent stock market meltdown.
FII retailing
According to data provided by SEBI, foreign institutional investors (FII) sold Indian stocks valued at over ₹23,000 crores in January 2024, which is why the stock market has been erratic over the last two weeks.
An increase in tensions worldwide
Crude oil prices and Red Sea shipments this month have been significantly impacted by the Israel-Hamas conflict and growing tensions in Gaza. Experts in the market think that the stock market is under more stress as a result of the restrictions on imports and exports.
Technical conflicts
The Nifty 50 has been declining for some time around the 21,500–21,700 range, but on Tuesday it fell below 21,500. Additionally, experts predicted that Nifty and Nifty Bank will keep declining over the course of the following several weeks due to increasing selling pressure.
