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The trend of decline in the Indian stock market continues in the first session of the week. On Monday, Nifty, Sensex and Nifty Bank opened with a decline of about 1%. During the initial trading, selling pressure is being seen in many big stocks. On the sectoral front, almost all sectors are trading in the red. The maximum pressure is being seen in realty, metal, infra and oil & gas stocks.
With this decline, the total market capitalization of all the companies listed on the Bombay Stock Exchange (BSE) has seen a decline of Rs 11.6 lakh crore today.
After the release of employment figures in the US, pressure was also seen in the US market on Friday. After this, there was a decline in the Asian markets in the early business. In fact, during the month of December, the employment figures in the US are at 2.56,000, while it was estimated to be 1,60,000. The employment figures are indicating strength in the US economy. In such a situation, the scope of rate cuts by the Federal Reserve seems to be decreasing. What is the major reason for this decline in the market:- 1. After strong growth in employment figures in the US, the 10-year bond yield saw a rise and it has reached 14-month highs. This has now reduced the scope of rate cuts. In such a situation, other emerging markets including India have become less attractive for investment. 2. Bond yield: The 10-year US bond yield has also reached 4.73%, which is the highest since April. Bond yields are rising due to strong employment figures and strong performance of the service sector. Apart from this, the bond yield has also strengthened due to the expectation of keeping rates stable in the January meeting of FOMC. 3. Rise in crude oil: Crude oil has now reached a 3-month high. Crude oil saw a jump after the US imposed a ban on Russia's crude supply. Brewed crude oil has now crossed $ 81 per barrel. It is at the highest level after August 27. WTI crude oil is at $ 77.97 per barrel. Pressure is being seen in many crude oil related stocks today. 4. Rupee weakens: The dollar index has reached 109.9. After this, on Monday, the rupee weakened by 23 paise against the dollar and opened at 86.27. Rupee is also showing weakness due to currency exchange rate and foreign outflow. After the selling by FIIs, the demand for dollar has increased and the rupee has shown weakness. But, this weakness in the rupee can be affected by further outflows. 5. Selling by FIIs: Due to selling by foreign portfolio investors (FPIs) and foreign institutional investors (FIIs), the market is also under pressure. Till January 10, this figure of selling by them has crossed ₹ 22,259 crores. 6. Impact of earnings downgrade: After 4 consecutive years of more than 10% growth, pressure is being seen on the earnings of companies for the last 2 quarters. There are no signs of any positive surprise in the third quarter. Brokerage firms said that earnings may remain less than 10% during the entire financial year 2025.
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