stock market crash

Share Market Crash | Why is Stock Market going down

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Many of us must be wondering what to do in today’s sharp fall pitch and what you should do as a retail investor. Nifty and Sensex falling today. We will provide the reasons for Indian stock market crash, and as a retail investor, what should we do in such a situation.
There are some flowing reasons for Indian stock market crash.
The first and foremost reason is the increasing border tension between Russia and Ukraine. Border tensions have been going on between Russia and Ukraine for a long time latest reports experience Russians have posted more than 100,000 soldiers on the Ukrainian border.

Some Western countries have the desire that Russia is preparing for military action. The US has also said that Russia can even carry out aerial bombings of Ukraine at any time.

In such a situation, many countries have also asked their citizens to leave Ukraine.US President Mr. Biden has also been invited to visit Ukraine.

If Russia conducts military action or aggression in Ukraine, then Western powers like European Union and the US can impose sanctions on Russia. And it will also have an impact on global markets and the Indian economy.

Now a big question comes up,

Why is Russia a commodity export powerhouse?

Russia is the largest exporter of crude oil and natural gas.
Russia is a major supplier of metals like aluminum, copper, etc., and agricultural products like wheat to a large number of countries.

Due to the increase in this tension, there is a feeling of fear in the global markets with markets reacting negatively.

In such situations, big investors and institutions prefer to move their capital out of equities and invest in safe havens such as bonds or gold. And so gold prices are also at their 3 month high.

Apart from this, the second big reason is that crude oil prices are increasing very fast.

a. There is also border tension between Russia and Ukraine because as we told you just now that Russia is the largest exporter of oil in the world.

b. Crude oil prices are at their record high of 7 years and have crossed more than $ 95 per barrel.

c. Now we know that almost all economic activities and industries depend on crude oil. Therefore, an increase in the price of crude oil leads to an increase in the prices of goods and services and increases inflation.

This will also have a huge impact on the Indian economy and market as India is a net importer of crude oil and rising oil prices will impact the overall economy and will also increase the fiscal deficit.

Reason for stock market crash

  • There is also another factor that along with the first 2 reasons will play a role in spreading negative sentiments in the Indian market.
  • CBI has filed a fraud case against ABG Group’s flagship company ABG Shipyard Limited and its directors. This company is involved in the business of shipbuilding and repair.
  • According to the CBI, the company has cheated about 28 banks to the extent of  ₹ 22842 crores. Many Banks like SBI, ICICI, IDBI, Bank of Baroda, etc. lent money to ABG Shipyard
  • Hence Nifty Bank and Nifty PSU Bank were also trading 2.5-3% down today. So these are all the big reasons why the market is going down. 

What should we do? As a retail investor.

First and foremost, you must not panic even during market declines.
Right now, your priority should be to protect your capital while reducing risk.

You should not invest with the intention of making quick profits because you may lose your investment during volatile times.

Continue your SIP if you invest in mutual funds to reap the benefits of the average. If you use the technique, your risk will be lower, and you will be able to profit from future market adjustments.

In direct stocks, you should only invest in high-quality, fundamentally sound companies that have continuously increased earnings and profit margins.

Most importantly, before making any kind of investment, do detailed research and analysis, consider your risk appetite and investment horizon, and only then take an investment decision.

Most importantly, before making any kind of investment, do detailed research and analysis, consider your risk appetite and investment horizon, and only then take an investment decision.

This article is for educational and informational purposes only. This article is not meant for advisory/recommendation purposes. Before Investing your wealth, do research and get more knowledge.

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