Sensex falls over 600 points: Key factors behind today's decline
What's the story
The Indian stock market witnessed a downturn today, with the benchmark Sensex falling over 600 points to an intraday low of 77,001. The Nifty 50 also witnessed a dip, falling below the 24,050 mark. The decline was largely attributed to geopolitical tensions in the Middle East and rising crude oil prices.
Market factors
US-Iran conflict intensifies, impacting global markets
The US-Iran conflict has escalated, with reports of the US launching its third consecutive night of strikes on Iran.
President Donald Trump has also announced a new blockade on Iranian trade in the Strait of Hormuz.
Meanwhile, Brent crude oil prices have jumped to nearly $85 per barrel, further straining India's fiscal position as it heavily relies on crude oil imports.
Economic indicators
Retail inflation in June breaches RBI's target
India's retail inflation surged to 4.38% in June, exceeding the Reserve Bank of India's (RBI) 4% target for the first time since January 2025.
The rise was driven by higher fuel prices and food costs.
Meanwhile, India's merchandise trade deficit widened to a five-month high of $30.43 billion in June due to rising commodity prices and a surge in imports outpacing exports.
Earnings impact
Earnings recovery expected from Q3FY27 onwards
The ongoing US-Iran conflict, which has pushed oil prices higher, has also affected earnings growth expectations.
Some analysts predict a recovery in earnings will only start from Q3FY27 onwards.
The Indian rupee also fell by 42 paise to 96.1 against the US dollar amid rising oil prices and weak macroeconomic data.