The Indian stock market has recently experienced a major downturn, with broad selling pressure across almost every segment and sector. Over the last six sessions, the market has consistently dropped in one single direction. This video dissects the major domestic and international factors driving this sharp correction and provides crucial technical analysis for the coming days.
Key Market Highlights & Crash Drivers:
• Significant Market Drop: Nifty dropped approximately 236 points (around 1%). Mid- and Small-cap stocks took a severe hit, with the small-cap index falling 2% and the mid-cap index also correcting around 2%. Sectors like IT, Pharma, healthcare, Metal, and PSU were all under significant pressure.
• Trump & Tariff Threats: Geopolitical tensions escalated following sudden announcements, including a threat of 100% tariffs on pharmaceuticals. While India mainly exports generic medicine, the current targets are branded and patented drugs. This still created huge uncertainty, especially since India is one of the world’s largest exporters of pharmaceuticals to the US. Major companies like Dr. Reddy’s, Sun Pharma, and Cipla carry a large share of this market, with Dr. Reddy’s deriving nearly 47% of its total revenue from the US.
• IT Sector Pressure (H-1B & Accenture): The IT sector faced pressure due to two main reasons:
1. H-1B Visa Fee Hike: The fee for the H-1B visa has been increased to nearly $100,000 (approximately ₹85 lakh to ₹1 crore), making sponsorship extremely expensive for companies. Since roughly 70% of H-1B holders are Indian, this directly impacts Indian IT companies operating in the US, potentially boosting US local jobs but increasing expenses for Indian firms.
2. Accenture Results: Accenture’s recent results showed a 15% drop in key metrics, which spread panic into the Indian IT segment. The Indian IT industry is currently 36% down from its all-time high.
Recession Fears & Global Issues:
• US Recession Risk: There is a high probability of a recession impacting the US. If a recession hits the US, US-based companies (the main clients of Indian IT firms like TCS and Infosys) will halt projects, leading to cost-cutting and layoffs in Indian IT companies.
• Fed’s Stance: The US Federal Reserve is currently not comfortable performing aggressive interest rate cuts, viewing the US economy as “under risk”. Although recent US GDP data was better than expected (3.8% vs. 3.3%/3.5% expected), tariff-related uncertainties are threatening stability.
• Russian Oil Controversy: US officials stated they would not cut the 25% additional penalty tariff on India until India stops buying oil from Russia. India defends its purchase based on cheaper pricing (which helps India refine and re-export oil, even to Ukraine) and concerns over national energy security. The US is also pressuring India to import milk products.
Market Outlook & Technical Analysis:
• Nifty Support: Nifty is entering a key support zone between 24,650 and 24,332. This area acted as strong support previously in May, June, and August. If uncertainties do not escalate, the market may consolidate at this level.
• Trend Weakness: On a weekly timeframe, the market structure is showing a “lower high formation,” indicating a potential move into a downtrend. The probability of the market moving higher is currently low, and consolidation is likely to continue.
• Strong Resistance: 25,000 is acting as a very strong resistance in the near term. Analysis of Open Interest and chart patterns confirms that deep selling is expected if the market attempts to move higher toward 25,000–25,400.
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Indian Stock Market Crash | Geopolitics, US Tariffs | Monday Market Prediction | Revanth Chalamala
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