Share Market Crash: There was a sudden sell-off in the Indian stock market this afternoon. After smooth trading in the early hours, there was a stampede in the market by afternoon. By 1:32 pm, the Sensex was down 1,042.86 points, or 1.43 percent, at 71,595.84. At the same time, the Nifty 50 also started trading down 360.65 points or 1.59 percent at 22,242.40.

This selling effect was not limited to Frontline Index. Midcap and smallcap stocks have been hit the hardest. The Nifty Midcap 100 index was down 1,179.40 points, or 1.98 percent, at 58,203.20. At the same time, Bank Nifty was also trading down 441.65 points or 0.80 percent at 54,613.90.

Four main reasons for decline in Dalal Street

There are several major domestic and international reasons behind this major decline in the market, which dampened investor sentiment.

1. Crude oil prices rise: Global oil benchmark Brent crude rose 2.02 percent to $102.2 a barrel. Increasing attacks on cargo ships in the Persian Gulf and Strait of Hormuz threaten to cut off crude oil supplies from the Middle East. The rising price of crude oil has increased the fear of inflation in the market again.
2. Sharp selling by FIIs: Foreign Institutional Investors (FIIs) have been steadily pulling their money out of the Indian market. According to the information, in Wednesday’s trading session itself, foreign investors from the equity market withdrew Rs. More than 6,100 crore shares were sold. This massive sell off broke the back of the market.
3. RBI’s tough stance: The Reserve Bank of India’s MPC meeting hiked the repo rate by 25 basis points to 5.50 percent. This is the first time in nearly 4 years that interest rates have been hiked. Along with this RBI has changed its stance from ‘neutral’ to ‘calibrated tightening’. It has become clear that the hope of a reduction in the interest rate in the near future has turned out to be false.

Heavy selling in key sectors including Adani Group

Adani Group shares saw a sharp fall in this period of all-round selling. Adani Enterprises was the top loser in the Nifty 50, down 8 percent, while Adani Ports shed over 4 percent. Adani Green Energy fell about 9 percent. Apart from this, there was weakness in Adani Power by around 6 percent, Adani Energy Solutions by over 5 percent and Adani Total Gas by around 3 percent. On the sectoral front, the Nifty Metal Index was the worst performer, falling over 3 percent. Nifty Energy also fell by around 2 percent.

Fintech and big stocks also under pressure

Shares of fintech companies related to digital payments also saw a big fall. Shares of Paytm and MobiKwik fell 7 percent each on reports of a delay in the UPI merchant fee (UPI MDR) to be implemented from October 15. On the other hand, shares of Pine Labs fell 3.1 percent. On the other hand, the shares of ITC also recorded a decrease of 3 percent. There was heavy selling pressure in the stock due to the deal of about 44 lakh shares of the company being done at a discount through 12 block deals.