Nine trading sessions, Sensex tumbles 3,426 points, wipes out Rs.16.59 lakh crore

Ahmedabad. 26 September 2022, Monday

The prediction that the Indian economy and stock market will be left out amid the challenges of the changing global economy, inflation and high interest rates is going wrong. Today, Sensex closed down 953 points at 57,145 and Nifty closed at 17,016, down 311 points. Selling was seen in the Indian market for the fourth consecutive day.

However, dt. After reaching highs of 60,571 and 18,070 in Sensex and Nifty on September 13, there is continued selling pressure. Since then, the Sensex has closed down 5.65 percent or 3426 and Nifty 5.83 percent or 1054 points in nine trading sessions. Along with this decline, a massive decline of Rs.16.59 lakh crore has been seen in the assets of investors in the stock market. When the market closed on September 13, the investor's assets or market cap was Rs. 286 lakh crore, which has reduced to Rs. 270 lakh crore today.

The Federal Reserve in America has been raising interest rates continuously since March to remove the highest inflation in 40 years. The announcement of another 0.75 percent hike last week signaled that interest rates will continue to rise. The chairman of the Federal Reserve says that the impact of inflation on consumers is more dangerous than the risk of a recession from rising interest rates, and that curbing inflation should be the top priority in these circumstances.

During the last week, as many as eight central banks of the world announced interest rate hikes in their economies. On September 30, the Reserve Bank of India is also likely to increase the interest rate by 0.50 percent.

As interest rates increase, money liquidity decreases, which is expected to affect people's purchases and the economy. It is also being assumed that the economy will slide into recession due to high interest rates. Due to the fear of recession, prices of various commodities are also falling. Instead of 110 dollars, crude oil is now getting the lowest level of 85 dollars per barrel for the calendar year 2022. Copper prices have fallen by 8.25 percent, aluminum by 12 percent, zinc by 17 percent in a single month.

The stock market is witnessing a decline due to recession worries and rising interest rates. A huge recovery was seen in the stock market in the month of August. The market was supported by Rs 22,100 crore purchase of foreign funds which were continuously selling, but selling of foreign funds is seen again in September. Foreign funds have now sold Rs 2,445 crore in the current month. The Indian market is also witnessing erosion amid concerns that such heavy selling in the market is due to rising dollar prices and the Indian rupee is at a historic low of 81.63.