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.

FAQs

What is the reason for sudden fall of Indian stock market? ›

According to experts, the biggest reason behind the recent volatility in the Indian stock market is the strong selloff by foreign institutional investors (FIIs). In just three trading sessions in May, FIIs have sold off Indian equities worth ₹982 crore, according to NSDL data.

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Why is the Indian market down? ›

The recent decline in the Indian stock market is mostly attributed to heavy selling by foreign portfolio investors (FPIs) ahead of the June 4 Lok Sabha election results. The Nifty 50 finished 140 points, or 0.62 percent, down at 22,302.50, while the Sensex closed 384 points, or 0.52 percent, lower at 73,511.85.

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Why is the stock market losing so much? ›

Stocks suffered their longest losing streak of the year, as geopolitical turmoil rattled Wall Street and investors slashed their bets on the Federal Reserve cutting interest rates any time soon. The S&P 500 fell 0.9 percent on Friday, its sixth consecutive decline, marking its worst run since October 2022.

What is the biggest loss in stock market in India? ›

Jan 22, 2008: The Sensex saw its biggest intra-day fall on Tuesday when it hit a low of 15,332, down 2,273 points. However, it recovered losses and closed at a loss of 875 points at 16,730. The Nifty closed at 4,899 at a loss of 310 points.

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What is affecting the Indian stock market? ›

Economic strength has a direct impact on the performance of the country's financial markets. Indicators such as GDP growth rate, inflation rate, spending and unemployment rate reflect economic health. A movement in these indicators causes the markets to respond rapidly.

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What happens if stock price goes to zero in India? ›

When a stock's price falls to zero, a shareholder's holdings in this stock become worthless. Major stock exchanges actually delist shares once they fall below specific price values.

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Why not to invest in India? ›

Foreign stock traders and real estate buyers face numerous hurdles when investing in India. In fact, you can't even legally purchase India property as a foreigner. You must either have status as an Indian citizen or PIO (Person of Indian Origin) to own freehold land.

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When Indian stock market is off? ›

The National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) remain open from Monday to Friday only and are shut on Saturdays and Sundays, except for any special trading sessions as announced by these exchanges. On festivals such as Diwali, market participants participate in Muhurat Trading.

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Do you lose all your money if the stock market crashes? ›

Do you lose all the money if the stock market crashes? No, a stock market crash only indicates a fall in prices where a majority of investors face losses but do not completely lose all the money. The money is lost only when the positions are sold during or after the crash.

Where did the money go when the stock market crashed? ›

The most straightforward answer to this question is that it actually disappeared into thin air, due to the decrease in demand for the stock, or, more specifically, the decrease in enough investors' favorable perceptions of it to move the price down by selling.

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At what age should you get out of the stock market? ›

There are no set ages to get into or to get out of the stock market. While older clients may want to reduce their investing risk as they age, this doesn't necessarily mean they should be totally out of the stock market.

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Why 95 percent of Indian traders lose money? ›

Relying On External Tips. Lastly, a significant reason for the high rate of losses among Indian traders is an overreliance on external tips and advice. Many traders base their trading decisions entirely on trading tips from friends, TV experts or unverified online sources.

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Why are Indian markets going up? ›

Strong GDP growth for India, ease in the US inflation, buzz in banking and other PSU firms are some of the major reasons for the bull trend in the Indian stock market, say experts.

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Why does the stock market rise and fall? ›

By this we mean that share prices change because of supply and demand. If more people want to buy a stock (demand) than sell it (supply), then the price moves up. Conversely, if more people wanted to sell a stock than buy it, there would be greater supply than demand, and the price would fall.

Is India's stock market closed today? ›

NSE or National Stock Exchange is open on the weekdays from Monday to Friday and is closed on Saturdays & Sundays, except for any special trading sessions that are announced.