Indian Share Market falls to Record low at 867 Points, Nifty <16,450 . Investors’ Wealth of 5 Lakh Crores sinks. Check out the Major Factors behind the Sensex Crash

Shobhit Chandola – Mumbai Uncensored, 7^th May 2022

Seems like the Beginning of the Financial Year 2022-23 isn’t going as smoothly as expected. On 6th March 2022, India witnessed the record Stock Market Crash. This can be termed as the weakest week since November 2021 as the Sensex falled to the record 867 points low. National Stock Exchange’s Nifty 50 Index registered an unprecedented low at 16,411 points ultimately losing out 271 points. NTPC, State Bank of India, TechMahindra, Indian Tobacco Company, NTPC thermal, ONGC, SunPharma and PowerGrid were the firms who rose to 2.21 percent and finished in the green.  Looking at the deeper picture and one finds out that the Aggregate Market Capitalisation of the top BSE MNCs came down to ₹254 Lakh Crore then what it was earlier at ₹259 lakh crore.

           Check out the Top Sensex Points Losers:

•  Bajaj Finance ( Market Capitalisation – 3.70 lakh crore ).
•  FMCG company Hindustan Unilever Market Cap fell to almost 5 Lakh crore
• Auto giant Maruti Suzuki suffered a big blow of 3.3% in a day ultimately to 7161 in BSE, Mumbai.
• Tech Firm Wipro also suffered a 2.7 % depreciation to Rs 487 market cap down with Rs 2.67 lakh crore.
• Axis Bank: The topmost private bank of India’s stock fell 4.1 % at Rs 673 bringing the Market Cap to Rs. 2.06 lakh crore.

     Major factors reported behind this steep crash of the Stock Market in India:

• The rise in the Interest rate of the US Federal Reserve with just 50% in a span of 22 years owing to the inflation ultimately pushing the Dollar up closing to  almostRs 77/$.
• The Bank of England’s interest rates saw a record rise in almost 13 years in order to defend the inflation announcing the economy to remain weaker for 2023 due to 10% inflation.
• Recently, RBI’s Governor Mr. Shashikant Das announced the Reverse Repo Rate to record 4.40% accompanied with the rise in the CRR.
• Discharge in Foreign Portfolio Investment in the first week of May turned out to be the eight straight FPI outflow.

• The fact that most of the  angel investors and the rookies of the Stock market shall be awaiting for the LIC Initial Public Offering to begin in order to take out money from the secondary market to invest upon the IPO. This got more evident with the LIC IPO oversubscription at 1.27x more than the shares reserved.
• Investors were expecting a big jump in RIL earnings which performed more than the expectations, ultimately hitting 100 billion $ revenue in the history.
•  Uncertainty of the Russia – Ukraine war has heavily affected the Oil Prices throughout the world due to the limited supply and sanctions put up by the European Union and other western allies. This ultimately has affected the market.

                                Conclusion

 It’s disconcerting to see that investors lost almost Rs 4 to 5 lakh crores in this May Stock Market Crash of India. But Once Uncle Ben said “With the Great Power comes the Great Responsibility”. It couldn’t be so surreal at this point of time. Currently the Financial Analysts see this as a dip for a short term as they consider the potential in the IT, Auto, Fintech and FMCG stocks in the longer run. But this Market Dip for a while has once again opened the doors for the middle class investors to strengthen their portfolio for the long term. By the times Bulls take a back seat, it’s up to the retail investors to bring out the maximum from the market.