Sensex tanks over 700 points: What's behind today's decline?
What's the story
The Indian stock market opened on a bearish note today, with the Sensex and Nifty extending their losses. The fall comes as the Indian rupee hit a new all-time low of 95.58 per dollar. This is due to rising oil prices and geopolitical tensions in the Middle East region, particularly after US President Donald Trump's rejection of Iran's peace proposal.
Market performance
IT stocks among top losers on Sensex
At the time of writing, the Sensex had plunged over 700 points to 75,307 while the Nifty fell by 194 points to 23,626. IT stocks such as Infosys, Tech Mahindra, TCS and HCL Tech were among the top losers on Sensex with losses of up to 3%. Other major companies like Adani Ports Maruti Suzuki Asian Paints ICICI Bank Bajaj Finserv Bajaj Finance HDFC Bank Hindustan Unilever also saw their shares fall by around 1%.
Market outlook
Nifty Smallcap 100, Nifty Midcap 100 slip into red
The bearish market sentiment was broad-based with Nifty Smallcap 100 and Nifty Midcap 100 indices also slipping into the red. Sectorally, Nifty IT declined over 2% while Nifty Metal gained over 0.5%. Vikram Kasat, Head Advisory at PL Capital, said investor mood was cautious due to continuing FII selling, weakening rupee, and uncertainties with global macro fundamentals. He added that domestic liquidity improved market breadth continue to act as buffers against these challenges.
Geopolitical influence
Geopolitical tensions rising oil prices weigh on market
Trump's statement that a ceasefire with Iran was "on life support" further dimmed hopes for a resolution of the Middle East conflict. This geopolitical tension coupled with rising oil prices has also affected India's economy, which is heavily reliant on energy imports. Brent crude rose by 1% to over $105 per barrel while WTI Crude also gained nearly 1% to $99 per barrel.
Investor activity
Foreign investors remain net sellers of Indian equities
Foreign investors remained net sellers of Indian equities, offloading shares worth ₹8,438 crore on Dalal Street on Monday. This marks the fifth consecutive session of selling by foreign investors. Vatsal Bhuva from LKP Securities said Nifty is likely to find immediate support near the 23,550-23,600 range where some buying interest or recovery could emerge. However any pullback rally is likely to face selling pressure near the 23,800 mark which has now turned into an important resistance level.