Stock Market News: There is continuous pressure in the Indian stock market for the last five trading sessions. Growing uncertainty over global trade, changing political developments in Washington and geopolitical tensions have weakened investors’ risk appetite. The effect of this was that BSE Sensex fell by more than 2,100 points in the last five days. While the Sensex closed at 85,762.01 on January 2, it slipped to 83,506.79 intra-day on Friday. Similarly, Nifty also came under pressure and slipped below 25,700.
1- Tremendous selling by foreign investors
The biggest reason for this decline has been heavy selling by foreign investors. Amid global uncertainty and trend of withdrawing capital from emerging markets, foreign institutional investors (FIIs) sold shares worth Rs 3,367.12 crore on January 8 alone. This continuous withdrawal also weakened the sentiment of domestic investors and the pressure on the market kept increasing.
2- Trump’s trade and tariff uncertainty
The second major reason is US President Donald Trump’s uncertain statements related to trade and tariffs. The warning of taking a tough stance on many countries including India for buying cheap crude oil from Russia has worried investors. There is discussion of a new bill in America, under which a tariff of up to 500 percent can be imposed on countries purchasing oil from Russia. Such apprehensions have created an atmosphere of fear in the global markets as well as the Indian stock market.
3- Result talks between India and America
Apart from this, lack of concrete results in India-US trade talks is also an important reason for the weakness of the market. Despite about six rounds of talks since March, no concrete agreement has been reached between the two countries. Already, the Trump administration has imposed a total tariff of 50 percent on India, which includes 25 percent as base tariff and 25 percent as penalty. India had called it unfair, but investors remain worried due to lack of solution.
4- Tension due to oil prices
The rising tension in oil prices has also proved negative for the market. Investors are closely monitoring the developments in Venezuela due to uncertainty over the supply of cheap oil from Russia and heavy dependence on imports. There is a possibility of rapid inflation in crude oil prices and increasing pressure on the current account deficit, which creates a risk for the stock market.
5-Falling rupee
Amidst all this, the weakness of the Indian rupee has also increased the concern of investors. After falling by about 4 percent last year, the rupee has now crossed the level of 91 against the dollar. Despite limited intervention by the Reserve Bank of India, the continued decline in the currency has raised questions about the flow of foreign capital and market stability. Due to all these factors, there is currently an atmosphere of pressure in the Indian stock market and investors are adopting a cautious attitude.
Also read: America’s tough stance on crude oil; Ambani plays a new leaf; Crude deal with Venezuela possible; movement seen in company shares too
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