New Delhi. Indian stock markets witnessed a significant decline on Thursday. Both the Sensex and Nifty, major indices, closed in the red. This downturn resulted in an estimated loss of approximately ₹3 trillion for investors.
Reasons for the Decline
Several international and domestic factors contributed to this sharp market downturn.
1. Rise in US Bond Yields
The surge in US bond yields fueled global investor concerns about rising interest rates. Increased interest rates would make borrowing more expensive for companies, potentially impacting investment and growth. This fear was a major driver of the sell-off.
2. Concerns about the US Economy
Moody's, a global rating agency, downgraded the US credit rating, increasing uncertainty surrounding the American economy. Furthermore, former President Donald Trump's proposed tax policies remain a cause for concern. According to the Congressional Budget Office (CBO), these policies could increase the US national debt by up to $3.8 trillion.
3. Global Tensions and Fears of a Coronavirus Resurgence
Escalating tensions between Israel and Iran, coupled with a rise in coronavirus cases in Southeast Asian countries, particularly Singapore and Hong Kong, also contributed to the market decline. Weak fourth-quarter earnings reports from Indian companies further dampened investor sentiment.
Extent of the Decline
On Thursday, the Sensex closed at 60,591.68, down 1,005 points, while the Nifty fell 275 points to 24,537. The market capitalization of BSE-listed companies decreased from ₹441.09 lakh crore to ₹438 lakh crore. This decline resulted in an approximate loss of ₹3 trillion in investor wealth.
Shares that Suffered Losses
Among the Sensex stocks, significant declines were observed in major companies such as M&M, PowerGrid, NTPC, ITC, Nestle India, Tata Motors, Tech Mahindra, RIL, and TCS. These companies experienced losses of up to 2.84%. However, Bharti Airtel and IndusInd Bank closed with marginal gains.
