Stock Market Crash: US stock market up, Indian market down; what is the reason?
The Indian stock market fell sharply on Wednesday (13 November 2024). The BSE benchmark index Sensex closed at a four-month low of 77,691, down 984 points. There is hardly any listed company left in sectors like banking, automobile, capital goods to real estate, which has not seen heavy selling. The NSE Nifty also closed at 23,559, down 324 points. This was the fifth consecutive day when the NSE has registered a decline.
On the other hand, if we talk about the US stock market, then there is a continuous rise there. Especially, after Donald Trump won the presidential election, it seems that the US stock market has got a new life. After the results of the US election, the Dow Jones Industrial Average has increased by about 2000 points. In the same period, the BSE Sensex has fallen by about 3000 points. Nifty has also corrected by about 1000 points during this period.
Why is the Indian stock market falling?
There are many reasons for the fall in the Indian stock market. One is that the valuation of the Indian stock market is very high. Foreign Institutional Investors (FII) are continuously selling. The quarterly results of big companies like Reliance Industries, Asian Paints and Britannia have also been very poor, which are not justifying the high valuation of the Indian market.
On top of that, the retail inflation figures have reached a 14-month high. This means that the RBI will not reduce interest rates in the near future, which would have given a boost to the market. All these factors together are bringing down the Indian market.
What is the reason for the rise in the US stock market?
The US stock market is very excited after Donald Trump won the presidential election. It believes that America will benefit from Trump’s protectionist policy. Trump has constantly talked about the ‘America First’ policy in his election campaigns. He has also talked about increasing customs duty on goods coming from India, China and Brazil. The US market feels that this will benefit domestic companies and give them a chance to move forward.
After Trump’s victory, the US dollar has also strengthened significantly and bond yields have also increased. Due to these factors, American investors are withdrawing money from markets around the world and going back to America. Due to this, the US stock market is booming.
Will the decline in the Indian stock market continue?
There is no major factor to support the Indian stock market in the near future. The results of the second quarter i.e. September quarter of most companies are continuously coming weak. Investors are upset with the Long Term Capital Gain (LTCG) tax. Market regulator SEBI is imposing new rules on traders every day. FIIs’ selling from the equity market is not stopping.
Inflation is also constantly skyrocketing. RBI Governor Shaktikanta Das has also indicated that there will be no cut in interest rates in the MPC meeting to be held in December. This suggests that the decline in the Indian stock market will continue for the time being.
