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Business News/ Markets / Stock Markets/  Nifty 50, Sensex drop about 1% each. Why is Indian stock market down today? — explained with 5 crucial reasons
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Nifty 50, Sensex drop about 1% each. Why is Indian stock market down today? — explained with 5 crucial reasons

Stock market today: The BSE Sensex today opened around 300 points lower at 72,462 level and went on to touch an intraday low of 72,007 mark

Stock market today: The Nifty 50 index opened below the psychological 22,000 mark and went on to slip below the 21,800 level for the first time since 15th February 2024 when it touched an intraday low of 21,793 mark.Premium
Stock market today: The Nifty 50 index opened below the psychological 22,000 mark and went on to slip below the 21,800 level for the first time since 15th February 2024 when it touched an intraday low of 21,793 mark.

Stock market today: Following weak global Asian stock markets after a trend reversal by the Central Bank of Japan, the Indian stock market witnessed sharp selling pressure during Tuesday deals. The Nifty 50 index opened below the psychological 22,000 mark and went on to touch an intraday low of 21,793 mark, logging an intrada loss of arouind 250 points or more than one percent dip against Monday's close of 22,055 level. While hitting the intraday low of 21,793 the 50-stock index went below the 21,800 mark for the first time since 15th February 2024. The BSE Sensex opened around 300 points lower at the 72,462 level and went on to touch an intraday low of 71,933 mark, logging around one percent dip on Tuesday's session. The Bank Nifty index also witnessed selling pressure and lost around 0.50 percent during intraday deals. The Bank Nifty today opened lower at the 46,421 mark and went on to touch an intraday low of 46,258 level. The broad market also witnessed high selling pressure as the small-cap index lost around 1.15 percent while the mid-cap index corrected more than 1.50 percent on Tuesday. All sectors ended red while the IT, tech, FMCG, oil & gas, power, PSU, and telecom stocks received maximum beating. The Nifty IT index corrected to the tune of 3 percent and breached its 9-week low on Tuesday's session.

Why Indian stock market is falling today?

On why the Indian stock market is falling today, stock market experts said that the dip in the US Fed rate cut buzz ahead of the FOMC meeting, and trend reversal by the central bank of Japan has hit global sentiments, especially the Asian stock market. Apart from this, weakness in the broad market, income tax planning ahead of the end of the current financial year, and the soaring US dollar are other reasons that have dragged the Indian stock market today.

Here we list out the top 5 reasons that have dragged the Indian stock market today:

1] Trend reversal by Bank of Japan: "After a gap of 17 years, the Bank of Japan has scrapped its negative interest rate policy. While announcing the unwinding of its aggressive monetary easing programme the central bank of Japan changed short-term interest rates from -0.10 to between 0-0.10 percent. This has triggered selling pressure in the Asian stock markets, except the Nikkei," said Avinash Gorakshkar, Head of Research at Profitmart Securities.

2] FOMC meeting: "Buzz for the US Fed rate cut has been hit badly after the hotter-than-expected US inflation data and PPI print last week. So, the market is expecting the announcement of further continuation of the higher interest rate in the upcoming US Fed's FOMC meeting. This is a negative development for assets other than the US dollar and US Treasury yield," said Saurabh Jain, Vice President — Research at SMC Global Securities.

Mukesh Kochar, National Head of Wealth at AUM Capital said, "The last-minute release and the various data points suggest a clear hold case for now. The last 2 inflation data points have been slightly higher than expected and various statements from the Fed officials suggest that they want to wait longer until they get assurance of direction of inflation towards 2%. It is important to look at the guidance the Fed gives during this meeting for the rest of the year. We expect the Fed to start cutting rates by 2nd half of the year. However, incoming data on inflation and employment numbers will be the key to deciding how early the rate cycle can reverse."

3] Income tax planning: Avinash Gorakshkar of Profitmart Securities went on to add that generally in March, investors rejig their portfolio ahead of the Income Tax Return (ITR) filing. Some people do profit-booking while some indulge in loss harvesting to contain their income tax outgo.

4] Weak Asian markets: “After the announcement of trend reversal by the Bank of Japan, selling pressure is visible in the Asian market that has turned the global sentiments cautious. This selling in the Indian stock market can be attributed to this weakness in the Asian stock market, especially in the Hang Seng," said Avinash Gorakshkar.

5] Weakness in broad market: Avinash Gorakshkar of Profitmart Securities said that weakness in the broad market is also not allowing the Indian market sentiments to improve. He said that in the last one month, the mid-cap index has corrected more than 5.60 percent while in March 2024, the situation is more alarming. Likewise, the small-cap index has crashed by around 10 percent in the last one month.

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

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ABOUT THE AUTHOR
Asit Manohar
Chief Content Producer at Live Mint Digital Team
Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
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Published: 19 Mar 2024, 12:14 PM IST
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