Indian stock market is running in a downward direction, is it because of the global economic recession?

For the last 1 week, a period of ups and downs is being seen in the Indian stock market.

Indian Stock Market Sensex

If we talk about Sensex and Nifty, Sensex fell from 58100 to 57,500 this week and recovered again and closed at 57,989 on Friday.

Indian Stock Market Nifty 50

On the other hand, the Nifty50 also came down from 17,136 in a week and touched its minimum point of 16,958, recovered again, and closed at 17,100 on Friday.

Indian Stock Market Banknifty

But that much recovery was not seen in Bank Nifty. Bank Nifty fell from 40,600 to a minimum of 38,926 this week and recovered from there to reach 39,600.

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Indian stock market is running in a downward direction, is it because of the global economic recession?

These are the possible reason may be,

Failure of US Banks 2023

The reason for this coming down of the market in a week can be attributed to the failure of the banks there in the American market. After the failure of the Silicon valley bank, as people started withdrawing their money from the bank, a situation of upheaval arose in the global market.

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USA Inflation rate and FED increasing interest rates

Whichever can be considered as the reason for the downfall of the Indian stock market. The same rising inflation rate in America is still an issue due to which there is an economic recession at the global level. Due to this, the prices of many things skyrocketed.

Due to the continuous increase in interest rates by the Federal Reserve System, the stock market has also seen ups and downs. It is not that the increase in the interest rates by the FED has had much effect on the inflation rate in America.

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USA inflation rate last year

The FED believe that they are raising interest rates so that they can bring America’s inflation rate down to 2%. Last year itself, the inflation rate in America reached a figure of 9% in June 2022. Which was itself the highest inflation rate of the last 40 years.

Other factors

At the same time, due to the war between Russia and Ukraine last year, there must have been an impact on the stock market. Which also exacerbated the global economic downturn.

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Conclusion

The same stability has not yet come to American banks. Banks like First Republic Bank and Credit Suisse are still seeing turmoil after Silicon Valley Bank. The loans taken by them and other news can still be the reason for the stock market to go down.