Why are Sensex and Nifty falling today?
What's the story
Indian equity markets opened lower today, with the Sensex down by some 600 points and the Nifty50 trading near the 24,600-mark. The fall comes after a multi-session selloff amid rising global geopolitical tensions. The war between Iran and Israel-US was a major factor behind today's market decline. ICICI Bank, IndiGo, L&T, UltraTech Cement, Tata Steel and HDFC Bank shares were among the top losers on Sensex.
Geopolitical tensions
War between Iran and Israel-US intensifies
The war between Iran and Israel-US has worsened, with leaders threatening further escalations. US Defense Secretary Pete Hegseth said the conflict has "only just begun." Over the weekend, the US and Israel launched airstrikes against Iran, killing its Supreme Leader Ayatollah Ali Khamenei. In retaliation, Iran launched counterattacks across several regions in the oil-rich Middle East. The ongoing conflict has left no signs of diplomatic resolution this week, spooking global investors.
Market response
How did other Asian markets fare today?
Global markets reacted negatively to the escalating Iran-Israel conflict. South Korea's Kospi fell nearly 2%, while HongKong's Hang Seng rose around 2%. China's Shanghai Composite gained 0.25%, and Japan's Nikkei 225 was nearly flat with a minor decline of 0.01%. European markets also closed lower yesterday, with Germany's DAX down by nearly 2% and France's CAC and UK's FTSE down by around 1.5% each.
Financial impact
Indian bond yield rises sharply amid foreign investors' selling spree
Indian bond yield has risen sharply this week, mirroring the sharp spike in crude oil prices amid escalating geopolitical tensions in the Middle East. Today, the yield on the benchmark 10-year government security has risen to 6.65%. Rising bond yields make government bonds more attractive than stocks, creating potential downside for markets. Foreign investors continued their selling spree of Indian equities during the last session, offloading shares worth ₹3,752 crore according to NSE data.
Market relief
Oil prices fell for the 1st time in 6 days
Oil prices have witnessed a massive rally lately, due to the closure of the Strait of Hormuz disrupting shipments and creating supply constraints. However, they fell today for the first time in six days after the US government granted waivers to Indian refiners for Russian crude purchases. This was done to ease supply constraints from the Middle East war. WTI Crude fell by around 1.3% to $79.97 per barrel while Brent Crude fell over 1% to $84.49 per barrel.