Why is the Share Market Down Today

The share market news provides the latest updates from the stock market. Millions of investors, traders, and others across India keep a close eye on this information to find answers to questions like, “Why is the stock market down today?” “Why is the SENSEX down?” and “Why is the NIFTY down?” Keep reading to learn more about stock market crashes, the reasons behind them, how the stock market functions, and what to do when the stock market crashes.

How does the stock market function?

SEBI is the regulatory body that ensures the stock market operates efficiently and transparently. The regulatory framework established by SEBI is designed to protect investors. Two main exchanges operate in the stock market: the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). These two major markets consist of primary and secondary markets. The primary market is where new securities are listed through Initial Public Offerings (IPOs), while the secondary market is where existing securities are traded through buying and selling. BSE SENSEX and NSE NIFTY 50 are two indices used to track market performance.

Investors can trade securities such as shares, mutual funds, bonds, and derivatives. Trading follows a T+1 settlement cycle, meaning all transactions are settled one day after the trade.

Timings for market activities:

·    Pre-opening Session – 9:00 – 9:15 am

·    Normal Trading – 9:30 am – 3:30 pm

·    Post-closing session – 3:30 pm – 4:00 pm

Reasons for stock market crash

To understand better, “Why is the stock market down today?”, let us dive deep into the reasons for the stock market crash

1. Economic Factors: There are various economic factors such as varying interest rates, Inflation, declining economy, tax increases, financial and political changes, changing value of the Indian Rupee, etc. These are some of the major economic factors that influence to decline in the share market. These situations can occur at any point in time and are beyond the control of investors.
2. International Factors: These events are unpredictable in nature and the kind of impact that they will have on the stock market. Factors such as war, unforeseen natural disasters, and radical changes in the government of a stable country highly impact stock prices.
3. Demand and Supply: The change in demand and supply equilibrium highly impacts share market prices. For instance, if the demand for the stock is high, but the supply is low, it influences the prices of those shares to rise. Concurrently, share price decreases, when the supply is high and demand is low. On the larger scale, if there is a huge disconnect between the demand and supply between various companies it can impact the entire share market.

Alongside, the above mentioned reasons, stock market crash is highly influenced by the global economic trends which can directly influence the stock market prices.

What to do when the stock market crashes?

Stock market crash news can be shocking for anyone. However, you should consider the following things to do to deal with stock market crashes:

1.     Maintain your calm: Stock market crash news can create panic all around and influence you to make an impulsive decision to sell your shares. However, to deal with a stock market crash is to stay calm and don’t sell the shares. Being patient can help you recover your loss by selling the shares at the right time.

2.    Consider acquiring additional shares: In case of a market crash, consider buying more shares as there will be a fall in the prices of these stocks. By buying more you can profit from the market. Also, you don’t buy the share in one go instead buy at regular intervals. This will ensure that you will not end up at a loss in case the market bounces back. While buying these stocks consider the companies that have good historical performance with high profits and stable management. The reason is that these companies have higher chances to recover from these market crashes faster.

3.    Continue holding your investments: To deal with market crashes, you need to stay invested and wait for the right moment for the market to rise again. Historically, in the financial market, after every stock market crash, there is a subsequent recovery.

Conclusion

Stock market news keeps you informed about current stock market activities happening in and around the stock market world. In case you encounter news about a stock market crash, or wondering why the stock market is down? You must remember stock market crashes are temporary. There is no need to panic about the fluctuations in the stock market. Always stay informed and or consult experienced investors to deal with such situations.

Disclaimer: The reasons mentioned above are illustrative examples of why the market may experience a downturn. Investors should conduct comprehensive research and analysis to identify the precise factors influencing market movements before making any investment decisions.