New Delhi: Indian stock market witnessed a huge decline on Monday after Diwali holiday. Both major indexes- Sensex and Nifty fell more than one and a half percent (Share Market Crash) in early trade. Stocks of all sectors saw a big decline. The biggest blow was suffered by billionaire businessman Mukesh Ambani's Reliance Industries. It fell by about 4 percent in early trade. Let us know what is the reason for this huge decline in the stock market.

Uncertainty over US presidential election

Presidential elections are going to be held in America on November 5. This time a tough competition is being seen between Kamala Harris and Donald Trump. There is a huge difference in the economic and geopolitical views and policies of both. This is the reason why investors are adopting a very cautious stance before the election results and their focus is on selling.
 

US Federal Reserve's decision on interest rates

The US central bank - Federal Reserve is going to have a meeting on November 7. A decision will be taken on interest rates in this. In the recent past, the US economic indicators have given better signals. This has reduced the expectation of any major cut in interest rates. This has also increased the instability in the Indian stock market, because many companies have a big business in the US.

Effect of rising prices of crude oil

OPEC+ announced on Sunday that it will not increase production now due to weak demand and increasing supply outside the group. Earlier OPEC+ had intended to increase production in December. This led to a surge in crude oil prices. This is the reason why shares of companies like Reliance Industries, Indian Oil and ONGC have fallen sharply.

Weak results for the second quarter of FY 2024-25

The financial results of many big companies in the second quarter of the financial year 2024-25 were not as expected. Bajaj Auto, Kotak Mahindra Bank, RBL Bank and IndusInd Bank are examples of this. Due to weak results, the morale of investors has also weakened and they are avoiding making big bets at this time.

Foreign investors continue to sell

Foreign Institutional Investors (FIIs) are continuously selling in the Indian stock market. Foreign investors made a huge withdrawal of Rs 94,000 crore (about $11.2 billion) from the Indian market in October. This became the worst month ever in terms of withdrawal. This trend is continuing in November as well. Foreign investors are selling due to the high valuation of the Indian stock market and turning to the Chinese market.