Sensex plunges 600 points: What's behind today's decline?
What's the story
The Indian stock market opened on a bearish note today, with the BSE Sensex and NSE Nifty both witnessing sharp declines. At around 10:00am, the Sensex had plunged by about 600 points or 0.8% to trade at around 74,979. The broader market index Nifty also fell by over 160 points or 0.7% to trade at around 23,474.95. This decline is largely attributed to rising crude oil prices and geopolitical tensions in West Asia.
Market impact
Rising oil prices impact Indian market
Brent crude futures have surged by 1.5% to nearly $100 per barrel, a major concern for India, the world's third-largest crude oil importer.
The rise in oil prices could widen the trade deficit, stoke inflation, and hinder India's growth prospects.
The Nifty IT index tumbled nearly 4% on Wednesday as the US suspended permanent labor certification filings for Cognizant, while Coforge Chairman OP Bhatt resigned with immediate effect following internal audit concerns over the board evaluation process.
Conflict escalation
Escalating West Asia conflict affects crude prices
The ongoing conflict in West Asia has escalated, with Iranian-backed Houthis in Yemen attacking several Saudi cities. This has further embroiled a US ally into the conflict.
Meanwhile, US forces have struck multiple Iranian oil tankers while Iran has attacked a US base in Jordan and reportedly captured a US military unmanned underwater vehicle, known as a Dive-LD.
These developments have added to the volatility of crude oil prices and heightened market uncertainty.
FII selling
FIIs turn net sellers, impacting sentiment
Foreign Institutional Investors (FIIs) have turned net sellers on September 8, offloading Indian equities worth ₹123 crore.
This trend of FII selling has been dampening sentiment on Dalal Street.
The rupee also fell by 14 paise to ₹94.88 against the US dollar in early trade today, extending its decline amid persistent FII selling over the past few sessions.