Sensex has fallen 4.58% i.e. 3744 points in the last one month. In just one day on January 6, the Sensex closed down by 1258 points. After all, what happened that the Indian stock market crashed as soon as the market opened on Monday. In just one day, Nifty has fallen by 400 points to the level of 23,600. Before we tell you the real reason for the market collapse, please tell us by commenting whether you are investing money in this fall or are in the mood to wait and watch.
Now let us know why there was so much chaos in the stock market today. The first reason for the huge selling in the stock market was the weak business updates of banks. There has been tremendous selling pressure in government banking stocks today. If you own banking stocks then you must have suffered its pain too. In fact, the business update given by government banks for the third quarter is not very satisfactory. Till now it was expected that the performance of public sector banks would be better in the third quarter. But the business update dashed that hope too. The fear of reduction in deposits is clearly visible in the business updates of banks, after which investors thought it best to leave government banks.
The second reason is the fear of which the market is troubling the investors as well as the common people. Four cases of HMPV, a virus originating from China, have been found in India, that too in just one day. Amidst all the difficulties already facing the stock market, the news of this new virus troubled the investors. Cases of this virus have been found in two children in Karnataka, one in Gujarat and one in Kolkata.
In the update given by the Health Ministry, it has been emphasized that HMPV infection is already spreading in India and other countries. However, the ministry says that there is no cause for concern at present. But seeing the impact of Corona, stock market investors did not take any chances today and sold heavily.
The third reason to turn off the mood of the stock market is the results of the third quarter. Due to weak results, investors are taking decisions cautiously so that they do not suffer any loss before the budget and monetary policy.
Vinod Nair, Research Head, Geojit Financial Services, said that unless the stock market gets any direction from the third quarter results, the market will keep going up and down.
Weak global signals became the fourth reason troubling the Indian stock market today. On January 6, Asian markets fell by 1.4 percent. At the same time, the strength of the US dollar, high bond yields and rise in crude oil prices created pressure on global markets. Crude oil prices are currently at their highest level since October 2024, due to which the global market is upset.
Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said, “The dollar index is currently at 109 and the yield on 10-year US bonds is 4.62%. Due to this, foreign investors are selling from India. Selling will continue until it is settled.
Along with this, foreign investors are in no mood to show any mercy to the Indian market. FIIs are continuously withdrawing money from the Indian stock market. So far in January 2025, FPIs have sold Rs 4,285 crore, due to which the pressure on the market continues.
In the end, if we look at Nifty on the technical chart, we will understand that there are still more difficulties. Nifty 50 today closed below its 200 days EMA i.e. at 23,616. And now it is below all its important moving averages. In such a situation when Nifty has broken its important level of 23,700. Its new support is between 23,450 to 23,500. The mood of the market may deteriorate further. There is a fear that Nifty may fall to the level of 23,263, which is the lowest level of November. On the other hand, if Nifty makes a comeback and 23,700 will be a big resistance level for it.