Stock Market Crash: Nifty 50 slips below 24K, Sensex tanks 1200 points — 5 reasons why Indian stock market fell today

Stock market crash: Following weak global market trends after the heightened tension in the Russia-Ukraine war and the Israel-Hezbollah war, the Indian markets ended lower on Thursday, November 28, after experiencing some pullback in the previous session. Pressure from the IT sectorand heavyweight stocks like Reliance Industries and HDFC Bank dragged the front-line indices lower.

Although the Adani Group stocks provided some support, it wasn’t enough to push the indices into positive territory. 

Amid weak global cues and a sell-off in IT stocks, the Nifty 50 ended the session with a sharp decline of 1.49%, closing below the psychological 24,000 mark at 23,914 points. Similarly, the Sensex posted a significant drop of 1.48%, settling below the 80,000 mark at 79,043 points.

On the other hand, the broader market managed to weather today's sell-off, with both the Nifty Midcap 100 and Nifty Smallcap 100 ending the session flat.

According to stock market experts, the Indian stock market fell today after trading range-bound for nearly three sessions. They said that due to the lack of big international triggers in the wake of the closed US stock market and the approaching Indian Union Budget 2025, DIIs are in a watch situation. Heightening tension in the Russia-Ukraine war and Israel-Hezbollah war after air strikes by Israel against the Iran-backed militant group Hezbollah, a strong US dollar, and discounted geopolitical triggers are some of the significant reasons that are pulling down the Indian stock market today.

However, they maintained that the current stock market crash can be termed mere profit-booking if the Nifty 50 index manages to close above the crucial 24,050 mark.

Below are some of the key reasons attributed by analysts for today's sharp fall:

Why is the Indian share market falling?

1] Stock market holiday in the US: “The Indian stock market surged yesterday due to the rising US stock market. However, there is a lack of global cues due to the stock market holiday in the American market today. This could be the possible reason for profit-booking trigger in the Indian stock market despite a gap-up opening in the Opening Bell,” said Mahesh M Ojha, AVP — Research at Hensex Securities.

2] Israel-Hezbollah war: “The market is facing uncertainty as the news of Israel defying the ceasefire with Hezbollah and hitting the Iran-backed militant group Hezbollah to store mid-range rockets in southern Lebanon has escalated the geopolitical tension in the Middle East,” said Hensex Securities expert.

3] Union Budget 2024: Regarding DIIs not buying in the current Indian stock market, Mahesh M Ojha said, “DIIs are waiting for the final cue from the Indian government after their victory in the Maharashtra Assembly Election. As the Union Budget 2024 is just two months away, they are in a Catch-22 situation, and hence they are non-participant in the current Indian stock market.”

4] Strong US dollar: Pointing towards the rising US dollar rates, Anshul Jain, Head of Research at Lakshimishree Investment and Securities, said, “Investors are switching money from the gold and equities to bond and forex market as the US dollar prices are continuously rising. This is also a reason for FIIs' continuous selling in the Indian stock market.”

5] Escalation in Russia-Ukraine war: “News of escalating war between Russia-Ukraine made traders nervous in carrying their long positions," said Devarsh Vakil, Deputy Head of Retail Research at HDFC Securities.

Stock market outlook

Speaking on the outlook for the Indian stock market after this fall, Sumeet Bagadia, Executive Director at Choice Broking, said, “The outlook for the Indian stock market has turned weak as the Nifty 50 index has broken below the crucial 24,000 mark. The 50-stock index has now immediate support placed at 23,800, and the frontline index may go down to the 23,500 mark on breaching below this immediate support."

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 taking any investment decisions.