The question of the reasons behind what is happening in the stock market concerns every investor. Following last week's turbulence, both market indices sharply declined at the opening of trading on Monday.
The BSE Sensex index, comprising 30 stocks, crashed by 600 points immediately after opening. Similarly, the NSE Nifty index lost more than 200 points, following the example of the Sensex.
At the start of trading on Monday, the BSE Sensex opened at 72,990, which is below Friday's closing level of 73,123. The rate of decline intensified; in just five minutes of trading, the index dropped by 609 points, reaching 72,514.
The situation with the NSE Nifty index was similar: it opened at 22,524, which is lower than the previous close of 22,600. Its rate of decline also increased, and shortly thereafter, this index of 50 stocks traded at 22,387, showing a drop of 213 points.
Against the backdrop of the significant decline on the first day of the trading week, 26 out of 30 Largecap BSE stocks were trading in the red zone. Among them were declines in stocks such as Asian Paints Share (3%), Bajaj Finance Share (2%), HUL Share (1.80%), and Infosys Share (1.70%).
Furthermore, stocks in the Midcap category, including AU Bank Share (6%), IDFC First Bank Share (2.70%), Sundaram Finance Share (2.20%), and Paytm Share (1.70%), also experienced a fall. In the Smallcap segment, MTAR Tech Share (5%) and Ujjivan Small Finance Bank Share (3.50%) showed a decrease.
Analyzing the causes of the stock market crash, fluctuations in crude oil prices on the international market are primarily cited. Despite a slight decrease in the price of Brent Crude Oil, it is trading around $115, having reached this level after April. This increases inflation risk and worsens sentiment in the stock markets.
Other factors include selling pressure among IT company stocks, which are experiencing a downturn. Moreover, the India VIX index, considered a measure of fear in the stock market, jumped by approximately 6 percent on Monday, reaching 18, which indicates possible instability in the stock market in the coming days.