Sensex tanks 650 points: What's behind today's decline?
What's the story
Indian stock markets witnessed another downturn today, with the Nifty 50 index falling below the 22,450 mark and the Sensex losing nearly 648.74 points to 72,600, at the time of writing. The fall was mainly due to rising crude oil prices and weakness across banking and metal stocks. The broader market also continued to remain under pressure, weighing heavily on investor sentiment.
Economic factors
Crude oil prices weigh on investor sentiment
Crude oil prices remained a major concern for investors, with Brent crude trading above $113 per barrel.
Higher oil prices could increase India's import bill, put pressure on the rupee and raise the risk of imported inflation. This could complicate the outlook for corporate earnings and the economy as a whole.
The Indian currency opened at ₹94.79 against the US dollar today, compared to Thursday's close of ₹94.82.
Market trends
Broader indices also under pressure
Earlier in the session, 97 constituents of both the Nifty Midcap 100 and Nifty Smallcap 100 were declining.
A total of 478 stocks in the Nifty 500 were trading lower, while 91 had hit their respective 52-week lows.
The pressure on smaller companies indicates that the sell-off was not restricted to a few large-cap stocks but affected a wider range of market participants.