Stock market today: The Indian stock market saw across-the-board selling in morning trade on Tuesday, December 16, tracking weak global cues. The Sensex dropped more than 400 points to hit an intraday low of 84,795, while the Nifty 50 slipped below the psychologically important level of 26,000, touching an intraday low of 25,901.
The midcap and smallcap segments, too, were under pressure; the BSE Midcap and Smallcap indices dropped more than half a per cent each during the session.
Investors lost approximately ₹2 lakh crore within the first half hour of the session, as the overall market capitalisation of BSE-listed firms was nearly ₹469 lakh crore by 9:45 am on Tuesday compared to ₹471 lakh crore in the previous session.
The domestic market has been in the doldrums this month. The Sensex and the Nifty 50 are down about 1% each in December so far, looking set to snap their three-month winning streak.
Why is the Indian stock market falling?
Experts highlight the following five reasons behind the market fall:
1. Rupee’s acute weakness against the US dollar
The Indian rupee is at its record low, hovering near 91 against the US dollar, dealing a severe blow to market sentiment. The domestic currency opened at 90.79 per dollar on Tuesday against the previous close of 90.73.
The domestic currency has fallen about 6% this year so far due to persistent FII outflows and trade imbalance.
“Three forces have driven rupee’s weakness: (i) a capital-flow deficit created by persistent FII equity outflows, (ii) a policy decision to allow the rupee to reflect fundamentals rather than defend arbitrary levels, and (iii) a structural import imbalance still tilted towards energy, electronics, and gold,” Rishabh Nahar, Partner and Fund Manager at Qode Advisors, told Mint.
2. Weak global cues
Major Asian peers, including Japan’s Nikkei, Korea’s Kospi, and Hong Kong’s Hang Seng, crashed up to 2% during the session ahead of key US macro data, such as the November jobs report due later today.
(This is a developing story. Please check back for fresh updates.)
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Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.