New Delhi: The Indian stock market was very excited on Wednesday due to Donald Trump's victory in the US presidential election. Both the major indexes i.e. Sensex and Nifty saw a jump of more than 1 percent each. Sensex once again crossed the psychological level of 80 thousand points.

But on Thursday, the Indian market lost all the gains of the previous day. Despite the record rise in the US market on Wednesday, the Sensex and Nifty have fallen by more than 1 percent each. Let us know what is the reason for this huge decline in the Indian stock market.

Record weakening of rupee

The Indian currency rupee is continuously weakening against the dollar. It has reached a record low of Rs 84.35. The effect of this pressure is visible on the stock market, because the weakness in the rupee will have a direct impact on the earnings of companies. If the trend of weakness in the rupee continues, then India's economic growth may also be affected.

Waiting for Fed Reserve's decision

The US Federal Reserve is going to decide on the policy interest rates today i.e. on 7 November. In the last meeting, it had cut the interest rates by half a percent. However, now the economic indicators are indicating the improvement in the US economy. In such a situation, investors are confused about what kind of decision the Federal Reserve will take on the interest rates.

Crude oil prices rise

Donald Trump had promised during the election campaign that if he becomes the President, he will reduce the limit of Iran's oil production so that its income is reduced and it cannot fund terrorism. Now after Trump's victory, there is a fear that the production and supply of crude oil may be disrupted. This has increased the instability in crude prices and the concern of investors.

Record selling by FII

Foreign Institutional Investors (FIIs) are continuing to withdraw from the Indian stock market. In October, foreign investors withdrew more than Rs 1 lakh crore from the Indian market. Their selling continues in November as well. Due to this, the Indian market is not getting a chance to recover properly. FIIs also sold equities worth Rs 4,445.59 crore on Wednesday.

Weak corporate results

The financial performance of most of the companies in the country was quite disappointing in the second quarter. According to a report, about 48 percent of the companies failed to meet their earning guidance. The valuation of most companies is also high. Due to this, investors are putting more emphasis on selling and profit booking.