On Friday, the Indian stock market saw a drop as both Sensex and Nifty fell nearly 1%. This happened because investors are worried about the US government’s growing debt and rising interest rates on US bonds.
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The Sensex went down by 1.06% to 80,727.11 points. It started the day at 81,323.05 but was lower than the previous day’s close of 81,596.63. The Nifty also dropped by 1.09%, falling to 24,541.6 from its opening of 24,733.95.
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V K Vijayakumar, a senior investment expert at Geojit Investments, said there is some fear in global markets. People are buying safer things like gold and Bitcoin instead of stocks. He explained that the US has a very high fiscal deficit (which means it is spending a lot more than it earns). The poor demand for US government bonds and the increase in their interest rates show that investors are losing confidence in US bonds.
Last week, Moody’s, a global rating agency, lowered the US government’s credit rating because the US debt and interest payments have increased a lot over the years.
Analysts also said the rise in US bond interest rates is making investors nervous.
In the US stock market, major indexes had a bad day on Wednesday. The Dow fell by 816.80 points (1.9%), the S&P 500 dropped by 95.85 points (1.6%), and the Nasdaq went down 270.07 points (1.4%).
On the other hand, Bitcoin reached a new high. This is because lawmakers in the US are showing more support for rules to regulate cryptocurrencies, which is making people more hopeful about digital currencies.
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In India, some sectors also saw losses. The Nifty Auto sector fell by 1.26%, and the Nifty IT sector went down by 0.76%.
Among the companies, Power Grid Corporation lost 2.19%, ITC dropped 1.65%, Reliance fell 1.59%, and Trent went down 1.58%. Other market indexes like Nifty Midcap 100 and Nifty Smallcap 100 also saw small declines.
