Blood bath in the stock market, investors lose Rs 20 lakh crore, five reasons behind big fall in Sensex-Nifty

Blood bath in the stock market – The stock market has experienced a seismic shift since the global trade war began. Today, the Sensex dropped 3939.68 points to close at 71425.01. Additionally, the Nifty saw an unprecedented decline of 1160.8 points. Today, investment capital was wasted to the tune of 20 lakh crores. Today’s BSE market capitalization is 383 lakh crores, up from 403.34 lakh crores on Friday. Only 320 of the 3877 stocks that were traded on the BSE showed an improvement. 3429 stocks, however, have plummeted. 520 scrips registered a lower circuit, while 727 scrips registered a year-low.

The worldwide recession brought on by tariffs is the cause of the stock market meltdown, which is comparable to the COVID-19 pandemic. The global stock markets are in a state of anarchy. The India VIX, the nation’s volatility index, has risen 52% to a record high of 21. Let’s examine the causes of the recent stock market meltdown.

Stock market crash today –

1. Global sales :

Global stock markets have experienced a tremendous sell-off as US President Donald Trump has shown no signs of reversing his aggressive tariff proposal. The status of the American stock market was similar to that of COVID-19. In the Asian financial markets, the Nikkei plummeted 2370.25 points and the Hang Seng by 2445 points, while the Dow Jones and Nasdaq fell 2231 and 962 points, respectively. The stock markets in Europe also experienced a 5% decline. It has had an effect on the Indian stock market as well.

Trump reiterated that he is not concerned about the trade war brought on the tariffs or the global economic slowdown. Tariffs will serve as medicine for America’s economic situation, and he will not back down. His trade policy will be sound.

2. Impact of a strict attitude towards tariffs :

With regard to levying duties on over 180 nations, the Trump administration has adopted a harsh posture. The market is now more concerned as a result. Negative expectations have been raised about a positive result from speedy negotiations with the US. As a result, market analysts are concerned that the Indian stock market may plummet even further during the current fiscal year’s first quarter.

3. Fear of economic recession :

Trump’s tariffs have prompted retaliation from nations like Canada and China. Consequently, a global trade war has begun. Trump’s tariffs will cause inflation to rise. Consequently, consumption and business profitability will decline. Consequently, this will have an impact on the economic development of numerous nations worldwide. The US and worldwide recession estimates have been raised by JP Morgan from 40% to 60%.

The US trade policy will cause inflation to rise. The recession will worsen as a result. Trump’s reciprocal tax of 26 percent has also caused Goldman Sachs to lower its forecast of India’s GDP from 6.3 percent to 6.1 percent.

4. FPI selling :

After increasing buying in the cash segment last month, FIIs have started selling again in April due to Trump’s tariffs. Amid global economic uncertainties, FPIs have withdrawn a total of Rs. 13730 crore in April so far. If India does not find a solution to the tariff issue with the Trump government, FPIs may register more selling.

5. RBI MPC meeting :

Today marks the beginning of the RBI‘s bi-monthly monetary policy meeting. On April 9, there’s a chance the RBI will further lower interest rates. which will encourage GDP expansion. Aside from the worldwide ramifications, domestic investors have halted new purchases for the time being and have taken a cautious stance in anticipation of the RBI pronouncement. Additionally, this week will also see the release of the fourth quarter results.

Sensex and Nifty News :

The Indian stock market has suffered greatly as a result of Donald Trump’s tariff battle. India’s Sensex and Nifty indices have now experienced a significant drop in the string of worldwide market meltdowns. The Sensex dropped 3914.75 points in a single swoop, landing at 71449.94 after closing at 75364 points earlier. Speaking of the Nifty, investors were alarmed when it saw a significant 1150-point collapse. The Nifty fell and hit 21758 during the pre-opening session.

What is the cause of the crash?

The reason for this crash is believed to be US President Trump’s tariff policy and the fear it has spread in the global market. Earlier, the Japanese, Hong Kong and Australian stock markets also witnessed a crash, which clearly shows that the concerns of a trade war are now shaking the whole world.