Share Market News / Fed, dollar, earnings and inflation, these 5 enemies will destroy the stock market!

Share Market News: The decline seen in the stock market in the last seven trading days has raised concerns for investors. This is the first time since March 2023 that the market has been in continuous decline for such a long period. Both the major indices, Sensex and Nifty, have closed with a huge decline.

Big fall in the market in 7 days

In the last 7 trading sessions, the Sensex has registered a total decline of 3.78%. The Sensex was last close to 80,000 on November 6, but after that it fell 3,039.12 points to 77,339.01 points. Similarly, the Nifty declined 4.21%, and it has come down 11% from its lifetime high.

Investors lose Rs 23.50 lakh crore

This decline has caused huge losses to investors. The total market capitalization of BSE was Rs 4,52,58,633.53 crore on November 6, which fell to Rs 4,29,08,846.36 crore in 7 trading days. During this period, investors suffered a total loss of Rs 23.50 lakh crore.

Five major reasons for the decline

Federal Reserve's interest rate policy:

Expectations of interest rate cuts by the US Federal Reserve are limited. According to Nomura's report, there may be a cut of up to 50 basis points by June next year, but there will be no change before that. This has also put pressure on the Indian stock market.

Rise in dollar index:

The dollar index is witnessing a steady rise. It has risen 4.67% in the last three months and is likely to reach the level of 107-108 in the near future. Foreign investors are withdrawing money from the Indian market due to the strong dollar.

Weak quarterly results of companies:

The performance of Indian companies in the second quarter was weaker than expected. According to research firm Jefferies, 63% of companies have reported a decline in profits. This trend may continue in the coming quarters, which may increase pressure in the market.

Rising inflation:

India's retail inflation rate stood at 6.21% in October, the highest in 14 months. Inflation is likely to remain around 6% in November as well, which may maintain negativity in the market.

Withdrawal of foreign investors:

Foreign portfolio investors (FIIs) have continuously withdrawn money from the Indian market. So far Rs 23,913 crore has been withdrawn in November. This figure has reached Rs 1.18 lakh crore in October and November.

Way forward: What should investors do?

Experts believe that the decline in the market is not going to stop yet. In such a situation, investors need to be cautious.

Long-term outlook: The decline in the market may be short-term. Long-term investors can consider it an investment opportunity.

Careful selection: Investors should focus on companies with good fundamentals.

Maintain liquidity: Investors should maintain liquidity in their portfolio at this time and avoid excessive risk.

Conclusion

The current decline in the stock market has not only caused huge losses to investors but has also created an atmosphere of uncertainty in the market. However, experts believe that this decline may be short-lived. Long-term investors can turn it into an opportunity with the right strategy.