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After a 2-day relief rally, the market is once again witnessing a sharp decline today. Caution is being seen in the US before the decision of the Federal Reserve. Nifty and Sensex are trading with a decline of more than 1% today. By 2 pm, Nifty slipped 286 points to 24,196 and Sensex fell 835 points to 79,542. On Wednesday, the total market capitalization of all the companies listed on BSE saw an increase of ₹ 8 lakh crore yesterday, which has decreased by about ₹ 3.4 lakh crore today.
Nifty IT, metal, auto and financial stocks are contributing the most to this market slowdown. However, after Donald Trump's victory yesterday, the US markets closed with tremendous gains. Dow Jones, S&P 500 index and Nasdaq managed to close at record highs.
Why such a big fall in the market today? Announcement of relief package in China: The 14th meeting of the NPC Standing Committee is going on in China, which will continue till November 8 (Friday). News agency Reuters has said in a report that China may announce an additional relief package of 10 trillion yuan in the coming years. After the news of this possible announcement, Hong Kong's Hang Seng index saw a rise of about 1%. Fed meeting: The meeting of the US central bank Federal Reserve is going on and it will be announced tonight (Indian time). The market is expecting a 25 basis point cut in rates this time. But, in the midst of this, the market is keeping an eye on Fed Chairman Jerome Powell's commentary on the future. In fact, if the Donald Trump administration decides to impose 60% tariff on China and 10-20% tariff on other countries, then it will increase inflation in America. In this way, the Federal Reserve's policy can go off track. Record fall in rupee: On Tuesday, the rupee has seen a record fall against the dollar. After Donald Trump's victory, the dollar is expected to strengthen in the coming times. Weak quarterly results: Weakness is being seen in the September quarter results. Many analysts believe that earnings growth has slowed down in some sectors, the effect of which is also being seen on the equity market. Waiting for Trump's policy: India can potentially benefit from Donald Trump's anti-China attitude. It creates opportunities for trade and strategy collaboration for India. However, Trump has also criticized India for high tariffs. He has also hinted at imposing tariffs on Indian exports going to America. In such a situation, its effect can also be seen on Indian business. FIIs Outflow: Foreign institutional investors are continuously selling in the Indian stock market. FIIs have once again sold ₹4,445.59 crore in the cash market on Wednesday. Earlier in the month of October, FIIs had sold about one lakh crore rupees. Selling in IT stocks: The news of Trump's victory led to a great rise in IT stocks on Wednesday. But, due to concerns about protectionist policies during Trump's tenure, pressure is being seen in IT stocks today. The results of Indian IT companies may be affected due to the reduction in American clients for software exports. This is the reason why stocks like Mphasis, LTIMindtree and Tech Mahindra have seen selling up to 2.5% today.
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