Today, the Indian stock market experienced a significant downturn, marking the third consecutive session of heavy selling. This downward trend can be attributed to various factors including the escalating Iran-Israel conflict in Gaza, which has heightened tensions in the Middle-East region. Additionally, concerns over rising US dollar rates and US Treasury yields, coupled with substantial selling by Foreign Institutional Investors (FIIs), have further exacerbated the market’s decline.
The Nifty 50 index opened lower at the 22,125 level, touching an intraday low of 22,103 points, reflecting a loss of nearly 650 points over the past three sessions. Similarly, the BSE Sensex opened at 72,892 and plummeted to an intraday low of 72,814 points, indicating a staggering decline of approximately 2,200 points over the same period. The Bank Nifty index also experienced a sharp decline, opening at 47,436 and reaching a low of 47,316 points, witnessing a crash of around 2,700 points since last week’s close.
Despite these significant losses, there are some indications of bottom fishing in the market, particularly in the small-cap and mid-cap indices, which have shown slight gains in the early morning session on Tuesday.
Experts attribute the market downturn to several key factors:
1. Escalating Middle-East Tensions: The ongoing Israel-Iran conflict has introduced geopolitical uncertainty, leading to apprehensions among investors about regional stability.
2. Weak Global Markets: Following the escalation of tensions in the Middle East, global markets, including the US and major Asian markets, have witnessed selling pressure, contributing to the downturn in Indian equities.
3. Rise in US Dollar Rates: The continuous rise in the US dollar, along with soaring US Treasury yields, has prompted investors to shift their focus away from equities towards dollar-denominated assets, impacting global equity markets, including India.
4. Surging Crude Oil Prices: Crude oil prices have surged to a six-month high, both domestically and internationally, raising concerns about inflation and its potential impact on the global economy.
5. Disappointing US Retail Sales: Higher-than-expected US retail sales numbers have raised fears of sustained inflation, diminishing hopes for a near-term US Fed rate cut. This anticipation has led to an increase in US dollar rates and Treasury yields, prompting investors to reallocate their investments away from equities.
Overall, the combination of these factors has contributed to the sharp decline in the Indian stock market today, underscoring the interconnectedness of global events and their impact on financial markets.
