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New Delhi, 22 October (Hindustan Reporter). The trend of weakness in the domestic stock market that started from the last two trading days of September is not stopping. From September 27 till date, there have been only 4 trading days on which the domestic stock market has managed to close on a strong note. Apart from this, Sensex and Nifty have closed in the red every day with a decline. The biggest reason for the ongoing decline in the market is believed to be the ongoing tension in the Middle East. Along with this, continuous selling in the Indian stock market by foreign institutional investors (FIIs), high valuation of the stock market, weak results of companies and nervousness of retail investors are also being considered as the reasons for the decline in the stock market.
Today once again a big fall was recorded in the domestic stock market. BSE Sensex fell 1,354 points from the upper level. Similarly, NSE's Nifty also fell by 436 points from the upper level. Due to this fall, investors lost Rs 8.86 lakh crore in a single day. There is also a possibility that this period of decline may be prolonged further.
According to market experts, due to the ongoing tension in the Middle East and the relief package announced in China to support the economy, most of the foreign investors are busy withdrawing their money through all-round selling. In the month of October, foreign investors have so far sold shares worth more than Rs 1 lakh crore. This is the largest figure of selling by foreign investors in a single month in the history of the Indian stock market. The business is going to continue for one more week this month. In such a situation, the figure of selling by foreign investors may be even bigger.
Ramesh Aggarwal, partner, RKG Securities, says that in response to the selling by foreign institutional investors, domestic institutional investors are also continuously buying. Due to this purchase, the stock market has been saved from crashing but the market sentiment has deteriorated due to continuous selling by foreign investors.
Due to selling by foreign institutional investors and worsening market sentiment, nervousness is also visible among retail investors and high net worth individuals i.e. HNI investors. Retail investors and HNI investors are also continuously selling in view of foreign investors. Due to this, despite continuous buying by domestic institutional investors, the decline of the stock market is not stopping.
Similarly, Prashant Dhami, Vice President of Dhami Securities, says that there was concern about the valuation of the Indian stock market for a long time. Market experts had warned many times before about a correction in the market. However, market sentiments remained positive till the last week of September, due to which by October 27, both the Sensex and Nifty indices were continuously making new records of all-time high. In such a situation, despite high valuations, fund managers were continuously buying shares. Now, due to continuous selling pressure from foreign investors, fund managers have started holding the money. That is why domestic institutional investors are not able to buy aggressively in response to the selling done by foreign institutional investors, due to which the pressure on the domestic stock market is continuously increasing.
Prashant Dhami says that a major reason for the market fall is the weak quarterly results of the companies. The September quarter results of most of the companies that influence the stock market movements have disappointed the market. Due to weak results, there has been huge downgrading in the shares of many big companies, due to which the selling in the market has intensified. The effect of this selling is also visible in the form of decline in the domestic stock market.
Market experts believe that currently there is no sign visible in the month of October from which recovery can be expected in the market. Negativity is continuously increasing on the global front. Because of this, foreign investors have started withdrawing their money. Right now the stock market needs some strong and positive news (trigger), so that the atmosphere of panic created among the investors can be removed, but the biggest question is when will the stock market get such positive news.