Sensex crashes 700 points: What's behind today's decline?
What's the story
The Indian stock market witnessed a major downturn today, with the benchmark indices Sensex and Nifty plummeting by as much as 0.9%. The fall was primarily triggered by rising oil prices and escalating tensions in the Middle East. Sensex fell some 712 points to 76,857 while Nifty50 declined by 207 points to 24,000 during Monday's trading session.
Market impact
Investor wealth eroded by over ₹2 lakh crore
The sharp fall in the indices has led to a loss of over ₹2 lakh crore in investor wealth. This has brought down the total market capitalization of all BSE-listed companies to ₹479 lakh crore.
Major stocks such as IndiGo, Tata Steel, Asian Paints, Maruti Suzuki, and L&T saw their share prices drop significantly during the trading session today.
Sectoral slump
Broader markets also fall today
The broader markets also fell into the red, with Nifty Smallcap 100 and Nifty Midcap 100 indices falling up to 0.5% each.
The India VIX, which measures market volatility, surged over 8% to 13.24 in the morning session today.
Sectorally, Nifty Auto, Nifty Financial Services, and Nifty Metal dropped over 1%, while Nifty IT bucked the trend with a nearly 0.7% rise during today's trading session.
Geopolitical influence
Iran-US conflict escalates, impacting oil prices
The market was also impacted by the escalation of the Iran-US conflict, with Iran launching strikes on Gulf states following US attacks.
This has pushed oil prices higher, with Brent crude futures rising over 4% to nearly $80 per barrel.
The rupee opened 0.4% lower at 95.705 per dollar today against Friday's close of 95.325 amid rising oil prices after recent Middle East war escalations.
Global impact
Global markets witness significant downturns
US Treasury yields also rose, further dampening equity market sentiment.
The yield on benchmark US 10-year notes rose to 4.585%, while the two-year note yield rose to 4.231%.
Globally, South Korea's Kospi crashed over 7% while Japan's Nikkei fell some 2% today.
China's Shanghai Composite was down by some 1.5% while Hong Kong's Hang Seng traded with marginal losses during today's trading session.