Why Stock Market Is Falling, with benchmark indices Sensex and Nifty 50 witnessing losses for three consecutive sessions as of January 10. A combination of weak global trends, a stronger US dollar, and rising bond yields are among the key reasons driving the market downward.
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Market Performance Overview
On January 10, both the Sensex and Nifty 50 dropped by over 0.5% during intraday trading. The Sensex opened at 77,682.59, slightly higher than its previous close of 77,620.21, but slipped to a low of 77,099.55 before closing 241 points lower at 77,378.91. Similarly, the Nifty 50 opened at 23,551.90, declined to 23,344.35, and ended the day at 23,431.50, losing 95 points. But do you know the reason why stock market is falling day by day?
Ruchir Sharma, Chairman of Rockefeller International, noted, “The stock market’s momentum looks likely to sputter in 2025 and… could falter as investors grow wary of the US’s mounting debt problems.”
The decline was sharper in midcap and small-cap stocks, with the BSE Midcap and Smallcap indices falling 2.13% and 2.40%, respectively. Over the last three trading sessions, the Sensex has fallen 1%, Nifty 50 has dropped 1.2%, and broader market indices have experienced even steeper declines. Investor wealth has eroded by ₹12 lakh crore, as the market capitalization of BSE-listed firms decreased from ₹442 lakh crore on January 7 to below ₹430 lakh crore.
Sectoral Performance
Most sectoral indices experienced losses, except for the Nifty IT index, which gained 3.44%, driven by strong Q3 results from Tata Consultancy Services (TCS). Other sectors, including Media, Realty, PSU Banks, Healthcare, Pharma, Consumer Durables, and Metals, recorded declines ranging from 2% to 4%. The Nifty Media index saw the steepest drop of 3.59%.
Why Stock Market Is Falling: Key Factors
1. Caution Over Q3 Earnings
Investors remain cautious ahead of Q3 earnings announcements. While TCS reported solid results, there is apprehension about other sectors, particularly banking, as foreign institutional selling continues to weigh heavily on sentiment.
2. Rising US Bond Yields and Dollar Strength
US treasury yields and the dollar have been climbing, fueled by strong economic data and reduced expectations of interest rate cuts by the Federal Reserve. This trend typically leads to capital outflows from emerging markets like India.
3. Foreign Investor Selling
Foreign portfolio investors (FPIs) have sold more than ₹19,000 crore worth of Indian equities in January. Concerns surrounding US monetary policy and trade uncertainties have contributed to this trend.
4. Macroeconomic Concerns
India’s GDP growth forecast for FY25 stands at 6.4%, the lowest in four years. This slowdown, along with high market valuations, has prompted financial institutions like HSBC to downgrade Indian equities. Concerns over economic growth have further dampened investor confidence.
5. Uncertainty Around US Policies
The possibility of inflationary pressures under President-elect Donald Trump’s trade and tariff policies has added to global market jitters. Speculation about the Federal Reserve’s limited rate cuts has further impacted sentiment.
Technical Analysis of Nifty 50
Experts have observed bearish signals in the Nifty 50, with key resistance levels at 24,000-24,150 and support at 23,250. Indicators such as the Relative Strength Index (RSI) suggest further weakness. Traders are advised to remain cautious and focus on selective opportunities.
Investor Takeaways
While the market is under pressure, long-term investors can explore stock-specific opportunities as Q3 earnings unfold. Short-term traders should remain vigilant and avoid aggressive moves in a volatile environment. These are some key facts on why stock market is falling day by day.
Disclaimer: The information provided is based on market analysis and expert opinions. Investors should consult certified financial advisors before making investment decisions.
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