Look at the devastation of the stock market, 50 lakh crores lost in 50 days

Share Market Crash: The Indian stock market has suffered heavy losses in the last two months. Sensex and Nifty have fallen sharply from their all-time highs, and investors have lost Rs 50 lakh crore. Profit booking by foreign investors (FPIs) has brought the market to this state. However, experts believe that the next 50 days will be very important for the market and will decide whether the market will be able to compensate for this loss or not.

Reason for huge fall in stock market

Profit booking by foreign investors

During October and November, foreign investors have withdrawn Rs 1.16 lakh crore from the Indian market. In October alone, there was a withdrawal of Rs 94,017 crore, which is a record. The main reason for this is the expensive valuation of the Indian stock market, due to which investors are withdrawing to make profits.

US elections and Trump administration policies

After Donald Trump's historic victory, his economic and political gestures have affected the global markets. Potential tariffs on China, the strength of the dollar, and changes in India-China trade relations are impacting the Indian market.

Poor second quarter results

India Inc.'s earnings declined in the second quarter for the first time since 2020. This affected the shares of companies, leading to a decline in the market.

Analysis of the decline in Sensex and Nifty

The Sensex was at its all-time high of 85,978.25 on September 27, which has fallen by 9,013.19 points or 10.50% so far.

The Nifty has seen a decline of 2,926.95 points or 11.13% from its all-time high of 26,277.35 points.

Will the market situation improve?

Reduction in the pace of foreign investors' withdrawals

The pace of withdrawals by foreign investors has slowed down in recent weeks. Last week, there was a withdrawal of only Rs 2,500 crore, which is less than the earlier weeks. This could be a positive sign for the market.

Role of new framework

The Reserve Bank of India (RBI) and SEBI have prepared a new framework to convert FPI into FDI. This will boost foreign investment, especially in mid-cap companies. It will attract long-term investment and bring stability to the market.

Role of domestic investors

If foreign investors stop their withdrawals, domestic investors can bring stability to the market. Investments by mutual funds and retail investors will support the market.

Impact of US policies

The policies of the Trump administration, such as toughness on China and strong ties with India, can affect the market. If US-China tensions escalate, India can become a major ally of the US in South Asia.

Earnings estimates

Experts believe that the earnings of companies will improve in the third and fourth quarters, which can boost the market.

Conclusion

The coming 50 days will be decisive for the Indian stock market. Despite profit booking by foreign investors and global factors, the role of domestic investors and policy reforms can bring the market back on track.

Although the market is likely to remain volatile, from a long-term perspective it may also present better opportunities for investors.