Business Desk: There was a big fall in the stock market on Tuesday. At the end of trading, the Sensex fell 1064 points to 80,684 while the Nifty also fell 332 points and closed at 24,336.

By 2 pm, the Sensex fell by more than a thousand points. Nifty also fell by more than 300 points. There were many reasons for the fall in the market. The biggest reason for this is America and China.

Bank, auto, metal and IT stocks fell the most. NSE’s Nifty Bank index was down by about 1%. Auto, IT and FMCG index was down by about 0.50%, while Nifty Media and Realty index was up by about 1%.

5 major reasons for the decline

Nervousness ahead of Fed meeting

The US central bank Federal Reserve will have a policy meeting tomorrow. Investors have become cautious before this meeting. The central bank may cut interest rates in this meeting. However, in the long run, its effect can be a good sign for the Indian stock market.

The dollar is strengthening

The value of the US dollar has been steadily rising against the rupee. The dollar index is stable at 106.77, but it has gained 5% this year. A strong dollar reduces the interest of foreign investors in the Indian stock market. This is because it makes investing in emerging markets less attractive.

Weakness in China’s economy

China’s consumption in November has been much lower than expected. Retail sales grew by just 3%, which is much lower than the 4.8% growth in October. On the other hand, industrial production grew by 5.4% year-on-year, which is in line with October. This slowdown can affect global commodity demand. This can pose a risk to the metal, energy and auto sectors in India. Nifty Metal and Auto sectors fell sharply in today’s trading.

trade deficit widens

India’s merchandise trade deficit widened to an all-time high of $37.84 billion in November from $27.1 billion in October. This happened as the country’s import bill rose and exports declined. The widening trade deficit will put pressure on the rupee, which will push it to 85 against the dollar. This will benefit exporters like IT and pharma from the fall in rupee but for importers, the rise in import costs will impact their stock prices.

Decline in global markets

Other markets around the world also fell on Tuesday due to the Fed Reserve meeting. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.3%. Japan’s Nikkei fell 0.15%, while futures trading indicated a sluggish start for European stock markets. Eurostoxx 50 futures fell 0.16%. German DAX futures fell 0.06%. FTSE futures fell 0.24%.