Share Market Crash: Today turned out to be a nightmare for the Indian stock market. The benchmark index showed signs of bearishness in early trading, but by afternoon the situation had completely worsened. There was such an all-out sell-off in the market that investors’ portfolios were filled with red marks.

The market collapsed completely around 2 pm. The Sensex fell nearly 1.65 percent to settle at 73,604.25, a massive 1,200-point decline. At the same time, the Nifty 50 index was also seen slipping 1.64 percent to settle at 23,070.05, down 375 points. Major stocks like HDFC Life, Bajaj Finance, Axis Bank, SBI Life Insurance, Shriram Finance, Bajaj Finserv played an important role in today’s heavy decline. The entire market came under pressure due to the decline of these giants.

Main reasons for market decline

International reasons are mainly responsible for this debacle in the stock market. The biggest reason for this is the rise in crude oil prices. Crude oil has crossed $106 per barrel in the international market. Due to this, the rising inflation in the country and the increase in India’s import bill have become more serious.

On the other hand, American bond yields rose to 5.11%. This has put enormous pressure on global equity valuations. Chief Investment Strategist at Geojit Investment Dr. VK Vijay Kumar believes Brent crude crossing $106 and the 10-year US Treasury yield reaching 5.11% are the biggest challenges for the Indian market. As long as crude oil prices remain high, a definite recovery in the market will be difficult.

Investors believe in small stocks

Amidst these large declines, an interesting trend is also being observed. While on one hand large cap stocks are getting beaten despite being cheap, on the other hand investors are investing heavily in midcap and small cap stocks. Money coming in from local investors is giving strength to these small stocks.

Experts say growth stocks are overbought despite expensive valuations. A strong flow of domestic liquidity keeps small stocks in the market. However, experts have also warned that this trend may reverse in the future. This will entirely depend on the future direction of crude oil and global bond yields.

The rupee is falling against the dollar

Along with this decline in the stock market, bad news has also come for investors from the currency market. In early trade, the Indian rupee fell 11 paise to 95.84 per dollar. The US dollar has strengthened due to ongoing tensions around the world and higher crude oil prices.

Traders associated with foreign capital say that the inflow of foreign capital also did not give much support to the rupee. Overall, market sentiment is weakening due to all-round sell-off in the domestic market and strengthening dollar. All these global factors combined to bleed the Indian stock market today.