Why rising interest rates cause the stock market to crash.

Why rising interest rates cause the stock market to crash. There are three major points here. 1. Interest expenses eat into the profit. Companies fund their businesses through debt. With rising interest rates, the cost of debt will be high. For example, with a 0.5 bps hike in interest rates, if the company has Rs 100 crore in debt, then the additional interest burden is Rs 50 lakh per annum. 2. The cost of debt increases, thus reducing consumption. Increased rates will eat into the consumer