Share Market News / America wreaks havoc on the market, biggest fall in 2 years, 17 lakh crores lost

Share Market News: The Indian stock market has been facing a deep crisis for the last few days. The change in interest rates by the US Federal Reserve and the massive sell-off by foreign investors have had a profound impact on the market sentiment. The Indian market has lost assets worth Rs 17 lakh crore in the last 5 trading sessions.

The biggest decline in a week

Last week, the stock market recorded its biggest weekly decline in 2 years. On the last trading day of the week, the Sensex fell 1.49% to close at 78,041.33, a massive drop of 1176 points. The Nifty also fell 1.34%, closing at 23,631.25, down 320 points.

A similar decline was seen in the market on the previous day as well. On Thursday, the Sensex closed at 79,218.05, down 964 points, while the Nifty fell 247 points to 23,951.70.

Major declining stocks and sectors

Only three of the 30 Sensex stocks performed positively. Shares of Nestle India and Titan closed with gains of 0.12% and 0.07% respectively. At the same time, major stocks like ICICI Bank, ITC, Asian Paints, Maruti, HCL Tech, Sun Pharma, and Hindustan Unilever registered a sharp decline.

Main reasons for the decline

US Federal Reserve decision:

The US Federal Reserve on December 18 reduced its interest rate by 25 basis points to 4.25-4.50%. However, for 2024 and 2025, the Fed projected only limited rate cuts, which was lower than market expectations. This led to disappointment in global markets.

Foreign investors sell-off:

Foreign institutional investors (FPIs) have sold Indian stocks worth more than ₹ 12,000 crore in the last four sessions. Strength in the dollar and rise in US bond yields drove investors away from the Indian market.

Negative trends in global markets:

The Fed's hawkish stance and other global economic concerns weakened investor sentiment. Along with this, investor confidence in emerging markets like India was affected.

Way forward

The performance of the Indian stock market will depend on global and domestic factors in the next few weeks.

Domestic economic indicators: Positive signs in the Indian economy and the central bank's policies may bring stability to the market.

Foreign investors' stance: The stability of the dollar and the upcoming policies of the Fed may attract foreign investment to the Indian market again.

Economic reforms: The Indian market will have to withstand foreign pressure while strengthening its domestic fundamentals.

Conclusion

The recent decline has hurt the Indian stock market deeply. However, this may be a temporary situation. Market experts believe that this decline may serve as an opportunity for long-term investors. But short-term investors need to proceed with caution and prudence.