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Share Market Crash Reasons: The condition of the Indian stock market is suffering these days. On Monday, July 28, the third consecutive session of the stock market declined. Today, the stock market has started weak on Tuesday. Both Sensex and NIFT are open with a decline.
One of the major reasons for this is the delay in the trade deal between America and India. As the date of the deadline of the tariff is coming closer to 1 August, foreign investors are withdrawing their money from the Indian stock market. In addition, the results of the weak quarter are also responsible for this decline.
Crores of investors submerged in three days
On Monday, the Sensex closed down 572 points or 0.70 % to close at 80,891.02, while the Nifty 50 index slipped 156 points or 0.63 % to close at 24,680.90. Due to heavy selling in all sectors, the BSE midcap index also declined by 0.73 percent and 1.31 percent in the Smallcap index. In the last three sessions, the Sensex has broken 1,836 points or 2.2 percent, while the Nifty 50 has declined by 2.1 percent.
In the just three days, investors lost 13 lakh crores as the market cap of listed companies in BSE declined from 460.35 lakh crore on Wednesday, 23 July to about 448 lakh crore on Monday, 28 July. On Monday alone, about 4 lakh crore was eliminated from the market and the market cap fell below 451.7 lakh crores.
The reason for the decline in the stock market
- The trade deal between India and America has not been finalized yet. There is no indication of any agreement before 1 August. VK Vijaykumar, the Chief Investment Strategist, Chief Investment of Geojit Investments, says, “Trade agreement with Japan and European Union, which were initially considered difficult, have become, but the much-awaited Indo-US-US trade agreement is still hanging in the balance. It has influenced the market perception.
- Foreign portfolio investors (FPIs) are continuously selling amidst increasing valuations of the Indian stock market. FPIS has sold Indian shares worth 30,509 crore in the cash segment in July (till 25th) so far (till 25th). In the last five consecutive days, the FPI has sold Indian shares worth more than 13,550 crore in the cash segment. According to The Mint’s report, Vijaykumar said, “The selling of 13,552 crore by the FII in the cash market last week has further increased the weakness of the market.”
- The results of the weak quarter of Indian companies have also increased the concern of investors. According to Vijayakumar, “The first quarter results, which are not yet indicating any major positive changes, are a matter of concern. In this weak phase of the market, investors will have to be alert and more on a particular stock. The stock market valuations are still likely to decline due to the company’s weak quarter results.
- The story of development alone cannot compensate for the loss from them amid weak corporate income and tariff concerns. Meanwhile, the Asian Development Bank (ADB) has reduced India’s GDP growth estimates for FY 26 to 6.5 percent of the 6.7 % estimate of 6.7 % of April 26 in view of the possible impact of American tariffs and uncertainty on related policy measures. Similarly, India Ratings and Research (IND-R) has also reduced its estimate of India’s GDP growth rate for FY 26 to 6.6 percent, citing changes in both domestic and global conditions.
- Technical factor is also responsible for this decline in the stock market. Last week, the index on the Nifty Weekly Chart has created a big bullish candle. Experts of Axis Securities believe that the index may face harsh resistance in the 20-day SMA. They believe that the decline may increase by 24,500-24,300 due to continuous increase in from 25,000, while a positive breakout above 25,000 can manage things.
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