Why market fell today: Investors lose over Rs 12 lakh cr

Benchmark BSE Sensex plunged over 1,000 points while Nifty50 closed below the 23,100 level on Monday, following a stronger-than-expected U.S. jobs report that dampened hopes of early interest rate cuts by the Federal Reserve. Concerns over slowing earnings also weighed on market sentiment.

The 30-share BSE Sensex fell 1,048 points or 1.38% to settle at 76,330, while the broader NSE Nifty declined 345 points or 1.47%, ending at 23,086.

1 Here are 3 reasons why the markets are falling today…

Global markets trade lower

Asia markets were trading on a lower note on Monday following the fall in the US markets on Friday. The US markets fell after the jobs report dented the hopes of early interest rate cuts by the US Fed. South Korea’s Kospi slumped 1.21% to trade at 2,485. The Asia Dow was trading 1.15% lower at 3,676.11. Hong Kong’s Hang Seng fell 1.14% to trade at 18,847. On Friday, the S&P 500 closed the session 1.54% lower at 5,827. The Nasdaq Composite dipped 1.63% to close the session at 19,161.63. The 30-stock Dow Jones Industrial Average declined 696.75 points or 1.63% to close at 41,938.45.

2 High crude oil prices

WTI crude prices were trading at $77.97 up by 1.83%, while Brent crude prices were trading at $81.15 up by 1.74%, on Monday morning. “The sentiment could worsen all through the trading day as crude oil prices have hit over a 3-month high due to US sanctions on Russian oil exports,” said Prashanth Tapse, Senior Vice President of Research at Mehta Equities. Also, the rise oil in prices was driven by higher demand for energy due to colder weather in the northern hemisphere and expectations of policy support from China.

3 Continued FII selling

Making the investors’ sentiment jittery, FIIs continued to sell in the Indian equity markets. So far, they have sold Rs 21,357.46 crore in January. During the last three months, FIIs were the net sellers of Rs 1,77,402.49 crore. The experts have added that the primary cause behind the continuous selling by foreign institutional investors is the consistent increase in the dollar index, which is above 109 now.

Three major factors affected the Indian markets: the fall in Asian and US markets, the rise in crude oil prices, and continuous selling by FIIs dampening investors’ sentiments.