Key Reason Why Stock Market Fall Today?
Reason why stock market fall is roughly 2.68% now natural question that comes to mind is why the market has fallen and is the market going to fall more from this level if yes then how much would it be?
Let us discuss the first question why the market has fallen the market has been trading at its all-time high now for a quite long time so it was eventually gonna fall. The factors that triggered the market fall we can analyze by studying the international market especially the US Stock Market since the Indian stock market and the US stock market are strongly co-related we can now look into some macropoints that triggered the market fall today.
Japanese Interest Rate Increase led to stock market fall
The Bank of Japan has kept its interest rate close to 0% for almost a decade it facilitates Quantitative Easing when interest rates are low in any economy people borrow more money and spend and invest more which a result rallies the stock market and other investment instruments and consumption within that economy.
Earlier Because the interest rates were kept to 0% by the Bank of Japan lot of people and lot of investors kept on borrowing and investing it across the globe and a large chunk of it was invested in the US Stock market, but now something has changed the Bank Of Japan last week increased the interest rate from close to 0% to 0.25% so the borrowing cost has gone up and as a result the interest rate arbitrage has come down a little bit and as a result it led to a little bit panic in the US Market and as i said before The US Stock market and Indian stock market is somewhat co-related to each other so the Indian stock market also fell by a certain degree today, this was the main macroeconomic point why the market has fell