The stock market plunged after three consecutive days of decline, plunging investors into a loss of Rs 4 lakh crore in seconds
The Indian stock market's key indexes, the Sensex and Nifty, opened lower by nearly 1% on Tuesday. Rising crude oil prices and persistent selling by foreign investors weakened the market sentiment after three days of gains.
On Tuesday, the Indian stock market's major indices Sensex and Nifty opened with a fall of about 1%. Rising crude oil prices and continuous selling by foreign investors weakened the market sentiment after three days of gains.
In early trade, Sensex fell 1.05% to 73,326.61, while Nifty fell 0.9% to 22,771.75. Along with the big stocks, midcap and smallcap indices also fell by about 1%,
showing pressure in the market. During this time, the total value of companies listed on BSE decreased by Rs 4.24 lakh crore in a few seconds. Investors suffered a loss of about Rs 4 lakh crore.
IndiGo, Zomato's parent company Eternal, Mahindra & Mahindra (M&M), State Bank of India (SBI),
Axis Bank and Asian Paints suffered the most in the initial decline of the stock market, falling by about 2-3%. Contrary to this trend, shares of Bajaj Finance, TechMahindra, HCL Tech and ITC were trading in the green, but with very marginal gains.
Among sectoral indices on the NSE, Nifty Auto suffered the biggest losses. It fell more than 2% in early trading hours, while the Nifty PSU Bank index declined 1.9%.
Meanwhile, Nifty Metal gained 0.7%, while the India Vix jumped 2%. On the NSE, approximately 1,105 stocks declined, while 1,398 advanced, and 82 remained unchanged. Let's explore why the stock market declined today.
The decline was due to these reasons
Trump's New Threats to Iran - US President Donald Trump has intensified his threats against Iran. He stated that if Iran does not comply, the country could suffer massive damage overnight.
Trump also stated that Iran's power plants and bridges could be destroyed within hours. Iran has rejected these claims. Meanwhile, attacks between Israel and Iran continue, and the situation shows no signs of returning to normal.
However, markets rose yesterday following news that a plan for an agreement between Iran and the US could be reached, allowing the Strait of Hormuz to reopen and trade to resume.
Oil prices again surpass $110/barrel - Oil prices have again surpassed $110 per barrel. This is due to tensions related to Iran and fears of a blockage in the Strait of Hormuz, which could impact oil supplies.
As of Tuesday morning, Brent crude was trading at around $111 per barrel and WTI crude at around $115 per barrel. Oil prices have remained strong since the war began and last surpassed $100 in March.
Rising bond yields – The yield on US government bonds has risen slightly. When bond yields rise, it means investors are withdrawing money from the stock market and investing it in safer avenues. This increases pressure on the stock market.
FII selling spree continues - Foreign investors are continuously selling shares in the Indian stock market.
According to NSE data, they have been selling shares for 24 consecutive days. On Monday, they sold shares worth approximately ₹8,167 crore. This has kept the market sentiment weak, even though domestic investors are buying.
Profit booking - One reason for today's decline is that investors have begun to cash out profits made over the past three days.
The Sensex and Nifty had risen by approximately 3% over the past three days. Consequently, some investors saw the right time to sell their shares, leading to a market decline.