15 lakh crores washed away due to huge fall in stock market, know the five reasons for the fall

Stock Market Crash Reason: The stock market has started the festival of Shravan month with a bang. In the morning session itself, the Sensex fell by 2600 points and the Nifty by 793 points, investors bought stocks and suffered a loss of Rs 14.78 lakh crore. Only 692 stocks are trading in favor of improvement on the BSE, while 3111 stocks are declining. Let us know the five reasons behind such a huge decline in the stock market…

1. Lessons from the US recession

US PMI data remains weak and rising unemployment has raised fears of recession in the US. US futures were also down with Nasdaq and Dow Jones suffering major losses. The impact of which was seen on Asian stock markets including India. Japan's Nikkei fell by 9.53 percent, KOSPI by 7.65 percent.

2. Geopolitical crisis

The war situation between Iran and Israel is getting worse. There have been reports in the Middle East that Iran and Hamas are preparing for retaliation after Israel killed a Hamas leader. Crude oil prices have increased due to the geopolitical crisis. Which affects the economic situation.

3. profit booking

Sensex and Nifty have seen a great rise since the results of the Lok Sabha elections in the country on June 4. Sensex rose by more than 8000 points and Nifty by more than 2400 points. Therefore, investors are booking profits considering the global factors.

4. impact of quarterly results

According to Motilal Oswal, corporate earnings declined 2 per cent year-on-year in the first quarter ended June amid weak deals, weak demand. Of the 30 Nifty 50 companies that have declared results, revenue grew 0.7 per cent, but net profit declined 9.4 per cent. The overall performance has been affected by the impact of global commodity prices.

5. Bank of Japan raised interest rates

The report of recession in America has reduced the possibility of reduction in interest rates in the Fed meeting to be held in September. On the other hand, the Bank of Japan has also increased interest rates to control inflation. Foreign exchange traders are afraid of incurring losses due to sudden increase.

Now what?

Prashant Tapase, Senior Vice President, Mehta Equities, said that overall, due to poor performance of corporates in the June quarter and technically overbought stock market, correction mood will prevail in the stock market. Heavy profit booking has been seen in Nifty Auto, Realty, Metal. Small investors can adopt a wait and watch policy until the situation calms down globally.