New Delhi: Today's trading session saw a sharp decline in the Sensex and Nifty, deepening the bearish sentiment in the market. Indian markets faced a volatile environment amid global market pressure, foreign capital outflows, and the selling of IT stocks. US Federal Reserve chief Jeremy Powell's statement, geopolitical tensions, and other domestic factors kept the Indian market in a negative mood. Here we will discuss the major reasons due to which the market fell today.

Pressure on the IT sector

The Nifty IT index fell by about 3 percent. Major IT companies like Tech Mahindra, TCS, Infosys, and Wipro declined by 2-4 percent. Powell's statement affected investor confidence, which increased selling in the IT sector.

Geopolitical tensions

Global geopolitical tensions also impacted Indian markets. The US President permitted Ukraine to use US missiles to strike deep inside Russia, raising concerns about a conflict between Russia and Ukraine. Apart from this, reports of Iran's supreme leader Ayatollah Ali Khamenei being in a coma also put pressure on the market.
 

Continuous selling by FIIs

Foreign institutional investors (FIIs) sold shares worth ₹1,849.87 crore last week, taking the total selling figure to ₹22,420 crore in the month of November. The high valuation of domestic stocks, more investment in China, and the strength of the US dollar forced foreign investors to withdraw capital from the Indian market.
 

Increase in the volatility index

India VIX, which is an indicator of market volatility, rose 5 percent to 15.51, clearly indicating that investors are in a state of fear and uncertainty. Weak signals from Wall Street and rising US bond yields further increased market pressure.
 

weakness in rupee

The Indian rupee also remained under pressure against the US dollar. Although the rupee rose somewhat by 8 paise to 84.38, foreign investors may continue to exit India due to the strength of the dollar and US Treasury yields. This is reducing the possibility of a rise in the Indian market.
 

Citi downgrades Indian stocks

Global brokerage firm Citi has downgraded Indian stocks, which has increased the negative sentiment in the market. They have considered the outlook for Indian stocks to be negative due to the weakness in the economy and sluggish quarterly results.
 

Powell's statement on rate cut

US Federal Reserve Chairman Jeremy Powell said that the Fed is not going to reduce rates soon because the US economy remains strong. Powell's statement created confusion in the market, and this increased the strength of the US dollar, which accelerated capital outflows from emerging markets.

The combination of all these factors led to a decline in the Indian stock market. Nifty, which opened with a slight improvement this morning, fell 0.69 percent to 23,369.85, which is 10 percent below the record high level of September. This decline is considered to be the sharpest correction since the Corona epidemic.