Stock Market Down Today : Reasons Behind Nifty’s Fall

Why market is falling?

The Nifty 50 crashes again for the 4th straight session- is what one can presume of the trading sessions on Monday, January 13, 2024. A hope of a Fed rate was not met, and when the US job-related data turned very positive, it ultimately crushed the Indian stock index. The dollar index hit below 110, forcing US statistics to get fears of a continued foreign outflow and taking the Rupee to a new low of 86.27 further. 

Concerns were also raised by crude prices reaching $81 per barrel, as BSE-listed stocks saw a Rs.5,13,691 decline in market cap within 30 minutes of trade. In this blog, we are discussing the reasons for the share market fall today.

Indian Stock Market Today

Uncertainty around the December quarter (Q3FY25) results, weak global signals, and inflation data are anticipated to dominate market sentiments and have an impact on the performance of key indices, the Sensex and Nifty.

The GIFT Nifty futures are trading 160 points lower at 23,341 at 6:32 AM, indicating a gap-down market opening.

The Sensex dropped 761.57 points, or 0.98%, to 76,617.34. At 23,255.40, the Nifty was down 176.10 points, or 0.75%. Three stocks have dropped for everyone that has increased so far.

The BSE Sensex today is Rs.76,779.52 at 12:14 pm.

Major Stocks Data

Avenue Supermarts Ltd. (DMart) fell 2.53% to Rs.3,592, while analysts base their decisions on a sharp cut in earnings and target multiples after the December quarter results. 

Adani Wilmar: Adani Wilmar saw its shares priced at Rs.269.40 amid a 10% dip in the sale. Shares of Adani Wilmar Ltd offered for sale (OFS) on the second day of offer for sale (OFS) fell by 7.75% to Rs.269.40. 

Adani Wilmar had earlier said through a statement to the stock exchanges regarding the possible use of oversubscription in response to the OFS to the extent of 1,96,29,910 equity shares, accounting for 1.51% share from the issued and paid-up equity share capital. This is, plus 17,54,56,612 Shares which account for 13.50% news based on the previous given total issued and paid-up equity share capital forming part of the base offer size.

Key Reasons Behind Fall In Nifty Today

Some of the concerning reasons for today’s fall in Nifty 50 today are-

1. FII Selling

On January 10, shares worth Rs.2,254.69 crore were sold by FIIs, and shares worth Rs. 3,961.92 crore were bought by DIIs.

2. Domestic Cues

Data on inflation for December will be released today. If food prices rise moderately according to analysts polled by Reuters, the Consumer Price Index for December can be down to 5.3%, ensuring that the general belief about probable further reductions by the central bank in rates will take place next month in view of slow economic growth.

3. Q3 Results 

The Q3 results of several companies, including Himadri Speciality Chemical, Den Networks, Angel One, Anand Rathi, Delta Corp, and HCL Technologies, will be made public, which could directly weaken the market sentiments.

4. Commodity Market

Following the imposition of broad sanctions on Russia's oil industry by the US Treasury Department, oil prices rose on Friday. US crude gained $2.65 (3.5%) to close at $76.57, the best level since October, while Brent crude increased $2.84 (3.69%) to $79.76 per barrel.

Gold prices increased once more as a result of demand for safe-haven assets in the face of policy uncertainty and the Federal Reserve's potential rate cut. Spot gold rose 0.5% to $2,688.40 an ounce, while US gold futures rose 1% to $2,717.60. 

5. Global Market Today 

Asia-Pacific markets began the week down after Friday's robust US jobs report tempered hopes for early interest rate cuts by the Federal Reserve. 

In early trading, Global Indices like the Kospi dipped 0.4% while the ASX 200 fell 0.8%. For a holiday, Japan's markets were closed.

Friday saw a significant decline in US share markets after a positive jobs report. The S&P 500, Dow Jones, and Nasdaq lost 1.54%, 1.63%, and 1.63% respectively.

China will release its December trade data later today. Investors are still wary about Chinese bond yields, though, after the 10-year bond yield fell to a record low last Friday when the central bank stopped buying government bonds. The offshore yuan has been declining since September, and last week the onshore yuan hit a 16-month low vs the dollar. 

Last Friday, the CSI 300 index was pushed all the way down to the level last reached in September 2004.

The important schedule up ahead primarily will be Wednesday's US inflation report, which would also include a meeting of the Bank of Korea and December. Labor market data from Australia, fourth-quarter GDP series, and data on retail sales and industrial output for China will be out on Friday.

Share Market Recovery in The Future?

November IIP statistic of 5.2% indicates that the Indian economy is recovering from the Q2 downturn.

With the Chief Executive Officers and Managing Directors of public sector banks and private lenders a meeting is to be held by Sanjay Malhotra (RBI Governor) on 16 January 2025 preceding the February monetary policy review. 

 Conclusion

Due to a cocktail of global and domestic factors like good u.s. job data, FII selling, rising crude prices, and weak Q3 projection results, the Indian stock market is crashing today. Inflation data and the uncertainties of the global markets continue to weaken market sentiment. Though challenges exist, knowledge of rising industrial production and possible interventions from the central bank raise hopes for the recovery. Investors should consider long-horizon opportunities amidst market volatility. Because these market falls are not new. The fall and rise of the Nifty is a common thing.

Disclaimer:Not a buy or sell recommendation. No investment advice is given. Future returns are not guaranteed by past returns. This Mutual Funds analysis is provided solely for informative purposes and should not be considered investment advice. Always conduct research and talk with a financial advisor before investing