Top 5 Reasons Behind Friday’s Stock Market Market Crash As Sensex Drops Over 950 Points

Sharp selloffs in domestic markets on Friday were prompted by bearish global sentiments as well as resurrected concerns over Covid-19. The 50-packed index plummeted over 300 points to shut at 17,900 levels, while the S&P BSE Sensex lost over 950 points to shut near 60,000 levels.

Additionally, broader markets suffered greatly from the sharp selloff and lagged benchmark indices. The Nifty SmallCap 100 and Nifty MidCap 100 indices experienced a 4% decline in trading. The Nifty PSU Bank, Nifty Realty, Nifty Metal, and Nifty Media, all indexes all saw declines of up to 6%, while all sectors were submerged in the sea of red.

5 Important Factors behind Today’s Stock Market Crash

1. The Global Mood Right Now

The rise of Covid-19 cases combined with worries about the US Fed’s continued aggressive stance released bears on all international markets. Technology stocks led the way in Thursday’s trading losses for US equities. The S&P 500, NASDAQ Composite, and Dow Jones dropped up to 2% each. The Asian markets also took a similar course and began trading downward this morning. Up to 1% of the Shanghai Composite, Kospi, Topix, Hang Seng, S&P 200, and Nikkei 225, indices fell.

2. The COVID -19 Fear

Investors were alarmed by the uptick in Covid-19 instances in China, which caused a commotion on international markets. A new article claims that China probably has 1 million Covid-19 outbreaks and 5,000 mortality. Furthermore, research indicated that China would see two peaks in the middle of January and March. The ministry of health in your country, however, recorded a weekly fall at a positive rate of 0.14 percent.

3. Technical Factors

Due to the current dire situation in international markets, Nifty50 fell below the 18,000 mark for the first time in more than a month. Technical charts indicate that if the 18,000 level support is broken, it may decrease the bias and for more decline to occur.

4. The Fall Of Rupee

On Friday, the local currency decreased by 7 paise to tentatively settle at 82.86 over the Us dollar. Meanwhile, the dollar increased 0.38 percent on Thursday as traders continued to believe that the US Fed may maintain its hawkish attitude in light of good economic statistics.

5. US Data

A flood of encouraging US consumer sentiment, third-quarter GDP, and joblessness claims statistics suggested that perhaps the Federal Reserve can maintain its hawkish stance in the February meeting. Traders forecast a slowdown to 25 bps at the following February meeting after a rate increase of 50 basis points (bps) at the December meeting.

According to data, US consumer confidence increased to 108.3 in December from 101.4 the previous month, the highest level in eight months. Meanwhile, the US Q3 GDP increased to 3.2% from 2.9%. However, according to figures from the labor department, initial joblessness claims increased to 2,16,000 from the previous month.