The Indian stock market saw a huge decline as crude oil prices rose rapidly and tensions again dominated West Asia. The latest exit of foreign investors and the global market downturn have also weighed on investor sentiment.
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In Tuesday’s trade, the Sensex fell 561.46 points, or 0.72 per cent, to close at 77,054.94. Nifty shares fell 158.95 points or 0.66 per cent to close at 24,052.05. A fall to 670 points was observed in Nifty Bank. Of the top 30 stocks on the BSE, only 6 closed higher, while the remaining 24 stocks closed lower. Shares of HCL Tech fell over 4 percent, while shares of Bajaj Finserv fell 2.5 percent. Apart from this, shares of Indigo, SBI, Mahindra & Mahindra and L&T also fell over 2 percent.
Amid the market downturn, there was also a huge decline in the market capitalization of the BSE. BSE market capitalization fell by Rs 3 million from Rs 482.41 million to Rs 479.40 million. Tell us why there was a big decline in the market…
Why did the Indian market fall sharply?
- The US military launched strikes on Iran on Monday for a third straight night as President Donald Trump renewed a blockade of Iranian ships and proposed 20 percent tariffs in the Strait of Hormuz. Because of this, the tension increased even more.
- Benchmark Brent crude rose 1.63 percent to US$84.60 a barrel, its highest level since the US and Iran signed a memorandum of understanding to end the war on June 17. This rise in oil prices is cause for concern.
- Asian markets were down, with South Korea’s Kospi falling 3.71 percent. Japan’s Nikkei 225, Shanghai’s SSE Composite and Hong Kong’s Hang Seng were also in the red. Signs of decline are also visible in the American market.
- Foreign institutional investors (FIIs) sold shares worth Rs 3,062.27 crore on Monday. Continuous withdrawal of funds from foreign investors puts pressure on domestic equities as heavy selling by foreign investors puts pressure on the index and weakens overall market sentiment.
- India’s VIX index, a gauge of market volatility, rose nearly 3 percent to around 14, indicating growing caution among investors.
- Due to geopolitical tensions, most Asian currencies, including the rupee, came under pressure, causing the rupee to fall 48 paise to 96.16 against the US dollar. At the interbank foreign exchange market, the rupee opened at 95.95 before falling to 96.16, down 48 paise from its previous closing price.
Lower diagram of 185 shares
Of the total 4,433 stocks, 1,502 stocks rose on the BSE. 2,735 stocks were trading lower while the remaining 196 stocks remained unchanged. The upper contour is visible in 180 shares and 185 shares are covered in the lower contour.
(Note: Please consult your financial advisor before investing in any stocks.)
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