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India’s stock market witnessed a sharp decline on Thursday, with both Sensex and Nifty falling more than 1%. This is the fifth consecutive day of decline in major indices. Here are a few factors contributing to this market downturn.
Election Jitters: The ongoing Lok Sabha elections are causing uncertainty, impacting investor sentiment. While a BJP-NDA victory is expected, a lower voter turnout raises questions about their anticipated seat count. Political commentary is closely watched, as it can significantly influence market mood.
Lackluster Earnings: The Q4 FY24 earnings season failed to impress, with no major surprises to trigger fresh buying on Dalal Street. This lackluster performance has dampened investor enthusiasm.
US Fed’s Hawkish Stance: Recent hawkish comments from US Federal Reserve officials are putting pressure on Indian equities. Their focus on potentially maintaining high interest rates throughout 2024, due to inflation concerns, is causing investors to pull out of riskier assets like Indian stocks.
Rising Oil Prices and US Treasury Yields: A slight increase in oil prices, coupled with a climb in the US dollar index and the 10-year US Treasury yield, is making bonds appear more attractive compared to equities. This shift in investor preference is leading to a decline in stock prices.
Derivative Contract Expiry: The weekly expiry of Nifty options contracts is also contributing to stock market volatility. As traders adjust their positions to manage these derivatives, it can lead to short-term price
