Stock Market Crash: On Friday, April 25, the last trading day of the week, the Indian stock market witnessed a huge decline. While there was a slight increase in the market in the morning, by afternoon the investors were disappointed. The Sensex fell by about 1000 points to reach the level of 78,800 while the Nifty closed at 23,908, falling by 335 points. Due to this decline, the market has suffered a huge loss of about Rs 10 lakh crore. This decline came at a time when global markets from America to Japan were seeing strength. In such a situation, the question is arising in the minds of the people that when everything was normal in the international market, then why did India suffer such a huge decline.
Increased tension between India and Pakistan became the reason for the decline
The first and biggest reason for this decline in the stock market is believed to be the increasing tension between India and Pakistan. On April 22, a major terrorist attack took place on Indian tourists in Pahalgam, Jammu and Kashmir, in which 26 people died. This attack is considered to be the most serious in the last two decades. After this, the central government immediately called an all-party meeting and as a step of action announced the breaking of the Indus Water Treaty. This is the first time that India has taken a step to officially stop this historic treaty after so many years. This treaty, which was signed between India and Pakistan in 1960 under the mediation of the World Bank, was made regarding the distribution of water between the two countries. This decision had a profound impact on the markets of not only India but also Pakistan. On Thursday, the Karachi Stock Exchange also recorded a decline of 2 thousand points. In response to this, Pakistan announced a ban on all types of trade with India, which further spread panic among investors.
Change in strategy of foreign investors
The second major reason for the decline in the stock market is being said to be the attitude of foreign investors. The results of the March quarter are now coming out but the results of many big companies have not been as expected. Due to this, the shares of those companies have registered a decline. Along with this, foreign investors are also seen changing their strategy and are withdrawing money from the market in large amounts. When the pace of foreign investment in the market slows down, it directly affects the Sensex and Nifty. This is the reason why the market is now looking weak and investors’ concerns have increased.
Fall in the attempt to make profit
Another reason for the fall was that the market was in a bullish trend for seven consecutive days. Till April 23, the market was witnessing a continuous rise and there was a slight slowdown on April 24. In such a situation, many investors started profit booking at higher levels, which increased the selling of shares. Talking about global markets, Wall Street in America showed a great rise. S&P rose by 2.03% while Nasdaq rose by 2.74%. Dow Jones Industrial also closed 1.23% up. In Asian markets, Japan’s Nikkei rose 1.23% while Korea’s Kospi slipped slightly. The Federal Reserve has indicated that if the direction of the economy becomes clear, they may reduce interest rates in June. Taiwan and Hong Kong markets also recorded gains. But despite all these positive signs, investors in India started selling out of panic due to domestic reasons, due to which the market crashed badly.
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