Stock Market Crash: During the day's trading in the Indian stock market today, a huge fall was recorded in both the major indices... Sensex and Nifty after the initial rise. The decline in the market was strengthened due to huge profit booking by investors and Covid related concerns. Apart from this, increased valuations of midcap and smallcap stocks also affected the sentiment.

Sensex, the main sensitive index of Bombay Stock Exchange (BSE), closed at 70,506 points with a decline of 931 points or 1.3 per cent after touching a high of 71,913 points during trading. Today's fall in Sensex is the biggest fall since October 26, 2023.

The main sensitive index of National Stock Exchange (NSE) Nifty closed at 21,150 points with a decline of 303 points or 1.4 percent. This is the biggest fall in Nifty after March 13, 2023.

Reason for decline in stock market?

Experts say that after the initial rise in the market, the main reason for the decline was profit-booking. Benchmark indices had been rising for the past seven weeks, boosted by strong macro market data, the possibility of rate cuts by major Western central banks and recent election results from five states. But in view of the boom in the market, investors started booking profits on a large scale.

UR Bhatt, co-founder of Alfaniti Fintech, said, “Till now the bullishness was based on the assumption that buying by foreign portfolio investors (FPIs) would continue. But they are booking profits this week. Due to this the decline got strengthened. After this year's gains, growing concerns over valuations, especially in midcap and smallcap stocks, and increasing cases of Covid infection affected investor sentiment. This started the selling phase.

Sanjeev Hota, head of research at Sharekhan by BNP Paribas, said, “After the huge rally, there is no scope for safety left in some parts of midcap and smallcap. So seeing some decline is good for the market. Overall, India will be strengthened by a stable government, better outlook for corporate earnings and improving macroeconomic outlook. Therefore, any major fall can provide an opportunity for investors to invest in quality stocks.

3,234 shares fell during trading

The market scope remained quite weak. During trading, 3,234 shares declined and 612 shares gained. Except one, all the Sensex stocks declined. Reliance Industries declined by 1.2 percent. RIL contributed the most to the fall of Sensex.