Stock Market Crash: All the optimism and hope of the new year hit a wall on Monday, January 6th. This is because the bears were in the driver’s seat with maximum advantage for almost the entire trade.
Sentiment took a big hit after the Indian Council of Medical Research detected two cases of human metapneumovirus (HMPV) in Karnataka through routine surveillance of multiple respiratory viral pathogens, leaving investors in the lurch. The stocks, right stocks, and central stocks were sold off all at once.
The Union Health Ministry stressed that it is important to note that neither patient has any history of international travel.
He stressed that HMPV is already prevalent globally, including in India, and cases of HMPV-related respiratory illnesses have been reported in various countries.
However, this did not prevent the market from plummeting.
Additionally, weaker global influence was also a spoil.
At the close of trade, the S&P BSE SENSEX fell 1,258.12 points or 1.59 per cent to 77,964.99 and the NSE’s NIFTY50 index fell 388.70 points or 1.62 per cent to end at 23,616.05.
In the broader market, the BSE Midcap index fell by 1,143.01 points or 2.44% to end at 45,793.07, while the BSE Smallcap index fell by 1,778.84 points or 3.17% to settle at 54,337.37.
Investor wealth declined by Rs 10.98 billion as the market capitalization of BSE-listed companies fell from Rs 4.49 billion to Rs 4.38 billion.
Here is a list of factors that caused today’s market crash:
HMPV virus fear
According to reports, the first case of the HMPV virus in Bangalore scared D Street investors as HMPV is spreading rapidly in China. This news development caused a stir across the investment community, as the deadly pandemic coronavirus disease (COVID-19) was also first reported in Wuhan, China in 2019.
The HMPV virus outbreak has spooked investors as the world has yet to fully recover from the trauma of the COVID-19 pandemic.
India VIX, the fear index or volatility index, rose 15.58% to 15.65 levels.
A volatility index is a measure of market expectations for short-term volatility. Volatility is often described as “the speed and magnitude of price changes” and is often referred to as risk in finance.
“The volatility index is a measure of the amount (calculated as annualized volatility and expressed as a percentage, e.g. 20%) that the underlying index is expected to move in the short term, based on the order book of underlying index options. ” he explains. N.S.E.
heavyweight falls
ITC shares closed 2.75 per cent lower at Rs 442.50 per share on the BSE after the company held a one-hour special session to investigate ITC Hotel prices.
Today, ITC held a pre-opening session for ITC Hotel Price Survey from 9:00 AM to 9:45 AM. Regular trading began at 10am.
It is said that the difference between ITC’s closing price on January 3, 2025 and the opening price determined during the Special Pre-Open Session (SPOS) will determine the stock price of the split company.
After a one-hour special session, the price found by ITC was ₹455.60 per share. ITC stock closed at ₹481.6 per share on NSE on Friday. This means a difference of ₹26.
The monthly management update for December shows that credit growth slowed significantly in the period as the bank focused on lowering its loan-to-deposit ratio (LDR). The bank’s total advances stood at Rs 25.4 crore, up 3% year-on-year and 0.9% quarter-on-quarter. Meanwhile, deposits stood at Rs 25.6 million, up 2.5% quarter-on-quarter and 15.8% year-on-year.
FII sales
Continuous selling by foreign investors was one of the major causes of the market crash.
According to exchange data, foreign institutional investors (FIIs) offloaded shares worth Rs 4,227.25 crore on Friday.
In December, foreign investors sold Indian stocks worth Rs 16,982.48 crore. In November, it sold shares worth Rs 45,974.12 crore.
Bulk sales in PSU banks
Although there was an overall sell-off, PSU banks were hit hard. Nifty PSU Bank index fell 4% to 6,354.15 level.
All 12 items were in the red.
In individual names, Union Bank of India ended 7.54% lower at Rs 114.70 after it said its domestic deposits declined by 2.36% to Rs 1,182,623 crore as on December 31, 2024. September 30, 2024.
On a year-on-year basis, domestic deposits grew by 2.45% from Rs 1,154,325 crore as on December 31, 2023.
Domestic CASA deposits during the quarter stood at Rs 3,95,364 crore, registering a decline of 0.44% YoY (YoY) and 0.23% QoQ (QoQ).
world stocks
In China, the yuan hit a 16-month low and blue-chip stocks traded at their lowest since late September, prompting the country’s stock exchange and central bank to protect the down market and protect the world’s second-largest economy. It seeks to allay investor concerns about the impact. Donald Trump’s return to the White House is imminent.
(Information provided by Reuters)
