Why is Indian stock market falling for last three days? Explained with 5 reasons (2024)

Stock market crash today: On account of the Iran-Israel conflict in Gaza fueling tension in the Middle-East region, rising US dollar rates and the US Treasury yield, FIIs' selling, etc., the Indian stock market extended its selling pattern for the third straight session on Tuesday. The Nifty 50 index opened lower at 22,125 level and went on to touch an intraday low of 22,103 mark, losing around 650 points in the last three straight sessions. The BSE Sensex today opened lower at the 72,892 mark and went on to touch an intraday low of 72,814 mark, logging around 2,184 points in the last sessions. Likewise, the Bank Nifty today opened at the 47,436 level and went on to touch today's low of 47,316 within a few minutes of the stock market's opening bell, recording to the tune of 2,670 points crash since Thursday's close last week.

Stock market crash today

In the last three sessions, the Nifty 50 index has crashed nearly 650 points, the BSE Sensex has lost around 2,200 points whereas the Bank Nifty index has nosedived to the tune of 2,700 points. However, the broad market is showing some signs of bottom fishing in early morning session on Tuesday. The small-cap index is up nearly one percent whereas the mid-cap index is up around 0.40 percent.

Why share market is down today?

On why the Indian stock market is down today, Avinash Gorakshkar, Head of Research at Profitmart Securities said, “Escalating tension in the Middle East due to the Israel-Iran war is the major reason for the fall in the Indian markets. However, there are some other reasons like rising US dollar and Treasury yields, FIIs selling, falling Indian National Rupee (INR), and rising crude oil prices that have fueled the selling pressure in the Indian stock market."

Experts listed out the following the following 5 major reasons for fall in the Indian stock market:

1] Iran-Israel war: “Tension in the Middle East is the major reason for selling in the Indian equity market as this has put doubts regarding the geo-political uncertainty in the region," said Avinash Gorakshkar.

2] Weal global market: “After escalation in the Middle East, selling has taken place across the global bourses. The US stock market ended lower on Friday. In the early morning session on Monday, major Asian markets like Nikkei, Hang Seng, Kospi, etc., are trading under pressure," said Sandeep Pandey, Founder of Basav Capital.

3] Rise in US dollar rates: “US dollar is continuously rising and the US dollar index has come close to 106 levels and the US dollar rate has touched 34-year high against the Japanese Yen. This has spurt the US Treasury yields that has spurt selling in global equity market, which includes the Indian stock market," said Avinash Gorakshkar of Profitmart Securities.

4] Soaring crude oil prices: "Crude oil prices have surged to the six-month high in domestic and international markets. The fuel prices have risen to the tune of 6 percent in March 2024 whereas, in April 2024, it has surged more than 3 percent till date," said Anuj Gupta, Head of Commodities & Currency at HDFC Securities.

“Soaring crude oil prices are not a good sign for the global economy as it is expected to put pressure on the local currency and inflation," said Sandeep Pandey of Basav Capital.

5] Disappointing US retail sales: “Due to the hotter-than-expected US retail sales numbers, the market is expecting that the US expenditure is still strong and it may fuel inflation. So, the market believes that such disappointing US retail sales numbers may dent the chances of a possible US Fed rate cut in the near term. Due to this buzz on US Fed interest rates, US dollar rates and US Treasury yields have gone up as equity investors are switching positions from equity to these assets," said Avinash Gorakshkar.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.

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