Share Market: 40 lakh crores drowned in stock market before Diwali, know the reason behind this bad situation

New Delhi: Till a few days ago, it was asked how much did you make? But now the question is how much did you lose? Because money is being lost continuously in the stock market for the last few weeks. After waiting for years, the portfolio of many investors was green, but within a month it has turned red. Most retail investors say that whatever was earned in a year, it was wiped out in a few days of decline. In this sense, this kind of decline is being seen for the first time after covid.

In fact, there is an uproar among the retail investors. It is not us, the data is saying it loudly. The data of the last one month is a witness that the market is going through a very bad phase. Every morning investors feel that now the market will rise. But selling is dominating every day, and the hard earned money of the investors is sinking. In such a situation, investors are saying that why is Maa Lakshmi so angry with the stock market before Diwali.

Huge fall in the stock market
In the last 1 month, select midcap-smallcap stocks have fallen by up to 50%. If we talk about the index, then Sensex has come down by about 6500 points from the all-time high and Nifty by about 2100 points. Nifty has fallen by more than 8%, while Sensex has also slipped by 8%. As a sector, the Defense Index has fallen 26% from its peak. At the same time, a decline of 14% has been registered in the auto sector and 13.5% in capital goods.

The figure of how much loss has been incurred in the last one month is shocking. In this storm of selling, investors have lost Rs 40 lakh crore within a month. On 27 September 2024, the market cap of BSE was around Rs 477 lakh crore, which fell to Rs 437 lakh crore on 25 October.

Now the loss can also be seen in this way that in the financial year 2023-24, the total GST collection was Rs 20.18 lakh crore. Whereas in the last one month, investors’ Rs 40 lakh crore have been lost in the market, in such a situation, twice the amount that the government earned from GST in a year, has been lost in the market within the last one month.

Profit booking is a big reason
Now the question arises that why is the market falling so much, and where can it take support. According to experts, profit booking is happening after a big rise in the market. Therefore, one has to be very careful while investing now. Some important reasons for the fall in the market are…

– Foreign investors are selling rapidly in the Indian market. They are withdrawing money from emerging markets like India and investing in China. In the month of October alone, foreign investors have withdrawn Rs 1.08 lakh crore from the market. Because at present the Chinese market is slightly cheaper than India in valuation.

– The second quarter results of many big companies are coming out to be poor, due to which the stocks are getting beaten up badly. This is also continuously deteriorating the market sentiment. Especially the results of the auto sector, FMCG and some tech companies have given a big shock to the market.

– In the last one and a half years, fundamentally, there was a good rise in the stocks, but in this rush, some such stocks also ran up a lot, for which there were no special reasons for the rise. Especially the shares of government companies, railway shares, shares of new technology companies and shares of government banks saw a lot of growth. Which was not matching the growth. Especially in the midcap and smallcap segment, some shares ran wildly, now such shares are getting beaten up a lot. Especially the selling is dominating in the shares with expensive valuation, and such shares have fallen up to 50 percent from their high.

Where will the decline stop?
According to experts, the market is in the selling zone, but the first support for Nifty is at 24000 points, after that the strong support is at 23800 points, from where the mood of the market can change.