Stock Market: The stock market is continuously declining, due to which investors have lost crores of rupees of capital. Uncertainty in the market has increased to such an extent that investors do not understand what to do next. This is happening for the first time since 1996 when the Producers Index is registering a decline of 5 consecutive months. This means that the worst performance of manufacturers is being seen in 29 years.
Major reasons for decline
The market has been witnessing a continuous decline since September. According to the data, the Builders Index has fallen by about 16 percent i.e. 4,150 points from its all-time high of 26,277.35. There are many important reasons behind this, the main ones being:
Foreign investors sell-off: Foreign institutional investors (FIIs) have started withdrawing their capital from the Indian market. On the last trading day of February i.e. Friday, FIIs sold shares worth Rs 11,639 crore, which was the highest in the entire month.
New tariff announced by the US: After the announcement of new tariffs by US President Donald Trump, there was turmoil in the global markets, which also affected the Indian market.
Weak quarterly results of Indian companies: The quarterly results of many companies in India were weaker than expected, which shook the confidence of investors.
Fear of recession in the market: Due to the possibility of recession in the global economy, investor sentiment has weakened, due to which they are exiting the stock market.
What will be the direction of the market in March?
Now the question arises whether this decline will stop in March or will the market see a bigger decline?
If we look at the data of the last 10 years, the market performance in March has been mixed:
The market declined in 2016, 2017, 2019, 2021, 2022, 2023 and 2024.
The market saw growth in 2015, 2018 and 2020.
The highest jump was seen in 2016, when the market rose by 11 percent due to buying by foreign investors. At the same time, in 2020 there was a massive decline of 23 percent due to Kovid-19.
Role of foreign investors
Foreign investors sold a total of Rs 34,574 crore in February 2024. During this, they bought only on two days (February 4 and February 18). If the selling by FIIs continues in March as well, the market may fall further.
What should Indian investors do?
It may be beneficial for retail investors to adopt some important strategies in this market:
Do not panic sell: Despite the fall in the market, long-term investors should not panic and sell their shares.
Invest in quality stocks: Invest in shares of companies with strong fundamentals, which have a good track record.
Invest cautiously: Given the uncertainty of the market, investors should invest in a phased manner.
Keep an eye on macroeconomic factors: It is important to keep a constant eye on interest rates, inflation and global events.
The ongoing decline in the stock market does not seem to stop at the moment. However, based on historical data, it can be said that some improvement can be seen in the market in March. It will be important to pay attention to the selling by foreign investors and global factors. Instead of panicking, investors should invest wisely, so that they can take advantage of the volatility of this market.
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