Sensex Slumps Over 1.2%: Factors Behind Sensex/Nifty Stock Market Fall? Live Updates

Stock Market Today: At 3:15 PM, the BSE Sensex dropped by 1064 points or 1.30 per cent, while the Nifty 50 slumped over 332 points or by 1.35 per cent. Both benchmark Indian equity indices are trading lower due to mixed global consequences. 

BSE Sensex dropped down to hit an intraday low of 80,612.20, and Nifty 50 fell down to a day low of 24,303.45. Despite the Indian stock market crash, the  Chinese market shows its resilience by tanking over 1.5 per cent.

Key Factors Behind Sensex/Nifty Stock Market Fall

1. US Federal Policy

After Friday’s highly volatile session, the Indian stock market was waiting for the US Fed Meeting scheduled on 18th December 2024. The meeting was all about the economic projections. Stocks like Reliance Industries, HDFC Bank, and TCS kept the indices under pressure due to the  US Federal Reserve’s Policy meeting. The interest rate decision is still about to be announced, and investors are closely observing it to make an informed decision for further sessions. 

2. FIIs Selling Pressure

Another reason behind the 1.23 per cent fall in BSE Sensex was the lack of fresh buying from FIIs (Foreign Institutional Investors). Foreign investors sold down equities worth around Rs 280 crore today. 

3. Decline in Indian Rupee

Heavy selling pressure in different sectors like FMCG, Information Technology, and finance and an increase in dollar price pressured the stock market to face this crash. Indian rupee hits an all-time low of 84.92 against one US dollar today. Anil Kumar Bhansali, Executive Director of Finrex Treasury Advisors LLP, acclaimed that increased gold buying is the reason behind the fall of the Indian rupee in non-deliverable forward markets.

4. Selling Pressure in Blue-Chip Stocks

Among all the 30 stocks of the benchmark equity index, weighted stocks like Reliance Industries, HDFC Bank, L&T, Nestle, Airtel, and JSW Steel have seen a major decline and pressurised BSE Sensex to record a day low of 80,612.20. 

5. Surge in Trade Deficit

The trade deficit increased to $37.8 billion in November 2024, causing a severe decline in the Indian rupee. This decline tends to provide benefits to exporters but also increases the cost of operations for the country’s importers. The increase in India’s trade deficit created a major decline in the stock prices of the companies involved in importing products and services from outside nations. 

Considerable Points

Despite today’s crash, key indices like Nifty Midcap and Nifty Smallcap declined only by 0.68% and 0.57%. High selling in 29 out of 30 Sensex stocks caused this fall of over 1.2%. Moreover, the FMCG sector has witnessed a mixed trend as the prices of stocks, including Umang Diaries and LT Foods were increased by 6.94 per cent and 2.98 per cent. The trend indicated a selective buying for SME stocks in India. 

Investors’ concern was clearly visible due to the spike of India VIX by 7% intraday. The US Federal Policy decision is not only a single point of consideration for the investors. They are also eyeing other global points like China’s loan prime rate (to be announced on 20th December 2024) and the Bank of Japan’s policy review (to be announced on 19th December 2024). 

Technical Outlook

Experts claimed that the Nifty 50 failed to sustain gains near its key resistance levels. A level of 24,770 will remain a major issue for investors, and its breakout will help the consolidation to continue further. The support level of Nifty 50 could be somewhere around 24,200 to 24,300.