Last Updated on August 5, 2024
On Monday today, the Indian equity benchmark indices BSE Sensex and Nifty50 plummeted, highlighting the stock market India crash. Triggered by a global market rout, the concerns about an impending US recession has also caused a massive sell-off. The BSE Sensex crash in this regard revealed a drop of over 2600 points, and Nifty crash highlighted a falloff below the 24,000 mark. Investors have faced a loss of 17 Lakh Crore INT, with mid and small cap stocks suffering the most. Nevertheless, with all that said and done, and despite the sharp decline, stock market in India has fared slightly better than their Asian counterparts
What are the contributing factors to the stock market India crash?
As India wakes up to the news of Sensex crash and Nifty crash, we believe there are several factors that have contributed to the market downturn, as highlight by experts. According to Dr. V K Vijayakumar of Geojit Financial, the recent rally in global stock market and for stock market India was based on the hope of a soft landing for the US economy. However, disappointing US job creation data in July and a spike in the unemployment rate to 4.3% have dashed these expectations, raising alarms about USA recession 2024. Additionally, rising geopolitical tensions in the Middle East and the unwinding of the Yen Carry trade added to market woes. In the same vein, indication of USA recession 2024 could be seen in its impact on the Indian rupee, which hit a record low. As per reports, the Indian rupee closed at 83.75 against the US dollar on friday 3th August 2024, reflecting the impact of global equity sell-offs and concerns over a US economic slowdown.
Why an impending USA Recession 2024 is worrying for the stock market India and Dalal Street:
The potential USA recession poses a more significant threat than other factors due to several reasons. Firstly, such a situation could hamper FII, foreign institutional investment in emerging markets such as India. In this regard, the US investors due to the fear of USA recession 2024 might withdraw their investment leading to the sell of shares in the Indian market and thus increasing the volatile nature of stock market India. Secondly, India’s reliance on foreign investments makes it vulnerable to reduced capital inflows, further straining the economy. The rupee’s decline highlights this vulnerability, potentially leading to higher import costs and inflation.
Moreover, signs of USA recession 2024 could adversely affect Indian exports. As US consumers cut back on imports, Indian industries which are heavily dependent on US markets could suffer. The cumulative effect of these factors, coupled with the stock market India crash on Monday, 5th August 2024, underscores the heightened anxiety surrounding a possible USA recession 2024, making it a more pressing concern for the Indian economy than other contributing elements.
Consequently, amidst such growing concerns, the inevitable question remains:
Should beginners invest in the stock market in India or not?Â
This decision mostly depends on the aspect of investment one is willing to embrace or undertake. In recessions, according to Griffith of Citi Global Wealth; it is important to have cash on hand. Still, there is a certain threat which lies in the premature sale of investments – missing the boat to market opportunities. Therefore it is more reasonable to move to investments that can be achieved even in the middle of a recession. In the case of newcomers to trading, it could be possible to enhance it through the help of India best trading apps. These apps which include Zerodha Kite and Upstox Pro are relatively easy to use and offer rich materials that can help one learn the basics of investing.
Why I say so is because, to my mind each beginning should be based on the sufficient amount of knowledge. Hence, taking Trading Courses Online is a good start towards building a good grounding. There are online programs available on Udemy and Coursera, which provides Trading Courses for beginners as well as advanced trading strategies. Moving forward, for those people who are willing to learn technical analysis or even day trading, Skillshare, and Bear Bull Traders provide detailed trading lessons that can be taken online.
Using India best trading apps can significantly enhance your trading experience. Apps like Angel Speed Pro and Edelweiss Mobile Trading App provide advanced market analysis tools, making them ideal for more experienced traders. Meanwhile, Groww Trading App is perfect for new investors due to its simplicity and educational resources. Taking the help of and utilising India best trading apps can help beginners navigate the stock market in India with more confidence and skill.
In the stock market India, defensive stocks including utilities and consumer staples stocks tend to be more sound during a downturn. Including these into your portfolio can go a long way in providing stability. Also, when investing one may use dollar-cost averaging to minimize risks due to the uniform distribution of the costs incurred on investment.
In conclusion, the investment, especially by beginners, should not be a taboo at all. By utilising India best trading apps and enrolling in Trading Courses Online, they can build a robust understanding of the market and develop strategies to navigate economic fluctuations effectively.
Bhaskarjyoti Paul is a seasoned content writer with over three years of experience within the ed-tech space. Specialising in study abroad and academic content, Bhaskarjyoti excels at creating SEO-optimized articles that drive traffic and engagement and blog and website content that engages and informs readers. Bhaskarjyoti handles social media content for Admissify, designs compelling narratives and spearheads engagement across multiple platforms. With a desire to help students and a keen eye for detail, Bhaskarjyoti brings a wealth of knowledge to every project.
