Sensex crashes over 900 points: What's worrying investors today?
What's the story
The Indian stock market witnessed a major fall today, with the BSE Sensex and NSE Nifty both declining by nearly 1.3%. The downturn was largely attributed to rising crude oil prices, geopolitical tensions between the US and Iran, and continued selling by foreign institutional investors (FIIs). At around 10:40am, the Sensex had plummeted by 935.64 points or 1.27% to trade at 72,960 while the broader Nifty index fell to 22,841, down by 300 points.
Economic implications
Brent crude near $106.5 per barrel
Brent crude futures have risen by 2% to nearly $106.5 per barrel, further straining India's economy as the world's third-largest crude importer.
Higher oil prices could fuel inflation, increase the import bill, and reduce corporate margins in India.
The US-Iran conflict has also added to these concerns with President Donald Trump rejecting Iran's proposal for a ceasefire and reopening of the Strait of Hormuz.
Market response
FIIs continue selling spree
FIIs continued their selling spree for the second consecutive session on Friday, offloading equities worth ₹3,696 crore.
Hariselvan Radhakrishnan, Founder & CEO of HST Wealth, a SEBI-registered Research Analyst firm, said that Nifty needs to hold above 23,000 to keep mean-reversion bounce alive.
A break could see the fall extend toward 22,600-22,580 where the 200-week SMA is placed followed by 22,400.
Resistance is at 23,300 and 23,500; structure remains sell-on-rise unless 23,500 is reclaimed.
Market trends
Broader market also declines
The broader market indices also witnessed a decline with Nifty Smallcap 100 and Nifty Midcap 100 falling over 1% each.
All sectoral indices traded in the red with Nifty Auto, Financial Services, FMCG, PSU Bank, Metal, Private Bank, and Realty dropping over 1% each.
The overall market breadth turned strongly negative with NSE witnessing 2,259 declines against just 759 advances while 116 stocks remained unchanged.