Nifty : 23,883.45 (-1.07%) & Sensex : 78,675.18 (-1.03%)
Today, the market closed in the red once again. Several factors continue to drive the market’s decline, though there are no new reasons contributing to today’s fall.
There are two primary reasons for the recent fall in the Indian stock market:
Heavy Selling by Foreign Institutional Investors (FIIs): FIIs have been consistently selling shares in the Indian market for over a month, with net sales exceeding Rs. 22,000 crore. Despite the selling pressure, Domestic Institutional Investors (DIIs) are buying to support the market, which is preventing a sharper decline. Recent mutual fund data reveals steady investments through SIPs, which has helped offset the FII outflows to some extent. However, unless FII selling slows or stops, the downward pressure on the market may continue.
Weak Corporate Earnings: Many major companies have reported unimpressive earnings recently, with most sectors showing weaker-than-expected results. This lack of strong performance has failed to lift the market and is contributing to the bearish trend. FIIs, who generally focus on large-cap stocks, are also selling shares in top companies like Reliance, leading to further pressure on the indices.
Other Contributing Factors:
- Global Uncertainty and Policy Decisions: Global factors, such as uncertainty around U.S. economic policy and upcoming elections in two state’s of India, are adding to market volatility.
- Upcoming Economic Data: Today, India’s inflation data will be released, which may influence the RBI’s future rate actions. This anticipation is also creating nervousness in the market, adding to the overall bearish sentiment.
In summary, FII selling and weak earnings are the primary reasons for the current market downturn, with additional pressures from global and domestic economic events.