Stock Market Crash: Sensex Below 72K, Nifty Near 21,800- Here 5 Factors Fueling the Market Freefall (image source: iStock)
Stock March Crash: On the last trading day of the week, the BSE Sensex and Nifty50 extended their losing streak amidst global turmoil fueled by the Iran-Israel conflict. The BSE Sensex plummeted by 600 points, breaching the 72,000 mark, while the Nifty50 approached 21,800. At 9:19 AM, the BSE Sensex was trading at 71,897.78, marking a decline of 591 points or 0.82 per cent, with the Nifty50 at 21,802.75, down by 193 points or 0.88 per cent. Here are five reasons behind the market bloodbath.
Major Laggards in the Stock Market Today
Axis Bank, HCL Technologies, Asian Paints, Larsen & Toubro, Tata Motors, Tata Consultancy Services, and Nestle India were among the significant losers, while ITC and HDFC Bank emerged as gainers.
Five Reasons Behind The Stock Market Crash
1. Geopolitical Tensions Rattle Market Confidence
Reports of escalating tensions between Iran and Israel have rattled market confidence. Weakness in Asian markets and sharp declines in US futures indicate heightened nervousness among equity investors. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, emphasised the uncertainty prevailing in the market and the potential for further Foreign Institutional Investor (FII) selling, putting pressure on large caps.
2.Global Markets
In the United States, stocks closed near the unchanged mark as investors assessed corporate earnings and economic data. While the Dow gained 0.06 per cent, the S&P 500 and Nasdaq declined by 0.22 per cent and 0.52 per cent, respectively. Asian markets mirrored this trend, with major indices trading lower.
3.FPI’s Offloading
Foreign portfolio investors (FPIs) continued to be net sellers for the fourth consecutive day, offloading shares worth Rs 4,260 crore on Tuesday. Conversely, domestic institutional investors (DIIs) bought shares worth Rs 2,285 crore.
4.Rupee Fall To Record Low
On Friday, the Indian rupee debuted at an all-time low, spurred by news of Israeli airstrikes in Iran, causing investors to flee from risky assets and seek refuge in safer options. Opening at 83.5550 against the U.S. dollar, it slid further from its previous record of 83.5475 and was down from 83.5375 on Thursday. Concurrently, U.S. equity futures and Asian shares dipped, while there was an uptick in demand for safe havens, particularly U.S. Treasuries.
5.Oil Price Surge
Oil prices experienced a notable uptick, rising by USD 3 a barrel, following reports of Israeli missiles striking a site in Iran. The perceived threat of potential disruption to oil supply ignited concerns among investors, leading benchmark contracts to surge before easing slightly. Brent futures saw an increase of USD 2.63, or 3 per cent, reaching USD 89.74 a barrel near USD 90 per barrel, while the US West Texas Intermediate contract climbed USD 2.56, or 3.1 per cent, to USD 84.66 per barrel.
