Share market down: The Indian stock markets declined strongly on Monday 3 February. The BSE Sensex fell 731 points to 76,774.05 in early trade. At the same time, the Nifty came to the level of 23,239.15 with a dive of 243 points or 1.03 percent. The biggest decline was seen in capital goods, power, utility and industrials shares. Even except for consumer durables, all other sectoral index were in red mark. Investors also suffered a lot in small and medium shares. The BSE midcap index fell 0.7 per cent, while the smallcap index fell by 1.6 per cent.
Market experts say that there were 4 main reasons behind this decline of the stock market-
Today’s new tariff announcement of US President Donald Trump was the new tariff announcement in the stock market, which has weakened investors at global level. Trump announced to impose new tariffs on Canada, Mexico and China on weekends. Canada and Mexico have 25 % tariffs. At the same time, 10 percent duty has been imposed on China. The move has given rise to fears of deteriorating and retaliation of business equations at global level. , Canada and Mexico vow to retaliate immediately. At the same time, China has said that it will challenge this decision in the World Trade Organization (WTO).
Dr. VK Vijaykumar, Chief Investment Strategist of Geojit Financial Services, said, “Trump can use Tariff as a political weapon and he can target the rest of the countries of the world on non-business issues.”
2. The slight increase in the budget of infrastructure disappointed investors
Infrastructure shares saw heavy selling on 3 February today. Due to this, its sectoral index fell to 2.3 percent. This decline occurred because the government made a slight increase in the capital experience in the budget, which the investors did not like. The market was hoping that the government would increase its focus on the capitil experience. Due to this disappointment, L&T shares fell by 4.42 per cent during trading today. At the same time, the share of Altratech, the country’s largest cement company, came down 2 percent. IRCON International also broke up to 5% during trading.
3. Rupee reached new record low against dollar
The value of most Asian currency declined against the dollar after Donald Trump’s announcements. The Indian rupee also went below the level of Rs 87 per dollar for the first time. The rupee reached a new record low of 87.07 during trading on Monday. Traders are expected to decline further amidst a strong dollar demand.
4. Fiis selling still continues
Apart from this, frequent selling of foreign institutional investors (FIIS) is also under pressure on the stock market. On Saturday, February 1, on the day of the budget, foreign investors sold shares worth Rs 1,327.09 crore in the Indian stock market. Earlier in January, he sold a total of Rs 87,374.66 crore. Market experts say that the focus of the stock market has now come back to the quarterly results of companies and the results of the RBI Monetary Policy Committee coming on 7 February. The market hopes that the Monetary Policy Committee may announce some deduction in interest rates on 7 February, which can increase cash in the market.
5. What does technical setup say?
Research Ajit Mishran, Senior Vice President of Railways Broking Limited, said that on the technical chart, the Nifty tested the important resistance level of the 200-day experienced moving average (DEMA) during the final business and came down from there. There is a significant support for the index at 23,000-23,300 from the bottom. At the same time, recovery can be seen from the top to 23,650. Currently, the sectoral index is expected to be mixed in the market. Stocks associated with interest rates and consumption can stay in focus.
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