Sensex down over 900 points: Key reasons behind today's decline
What's the story
The Indian stock market is witnessing a decline today, with the BSE Sensex falling over 900 points. The Nifty 50 index also fell below the important support level and slipped below the 24,000 mark. The fall in the Indian stock market can be attributed to five major reasons: escalating tensions in India-Pakistan conflict; weak global cues; rising US dollar rates; value buying in crude oil prices; and inconclusive India-US trade deal talks.
Market status
BSE Sensex and Nifty 50 index performance
The Nifty 50 index opened at 23,935 but saw some value buying and neared the 24,000 levels. However, it still trades below its crucial 200-DEMA support at 24,050. The BSE Sensex opened lower at 78,968 and hit an intraday low of over 1,350 points below the previous close. Despite a brief recovery, it trades 900 points in the negative territory at 79,416.
Geopolitical tension
Impact of India-Pakistan conflict on stock market
The rising tensions between India and Pakistan have led to a lot of volatility in the Indian stock market. Profitmart Securities Head of Research Avinash Gorakshkar said investors are hesitant to take risks amid the heightened tensions. SMC Global Securities Senior Research Analyst Seema Srivastava added that historically, corrections are usually restricted to 5-10% during geopolitical tensions, but recoveries are swift.
Trade uncertainty
Uncertainty in India-US trade deal talks
The absence of a concrete outcome from the India-US trade deal talks is another reason behind the market's decline. Gorakshkar observed that despite both sides claiming imminent breakthroughs, there is no solid evidence of a successful resolution. This ongoing tariff uncertainty has prompted investors to shy away from risky assets like equity.
Oil market
Value buying in crude oil prices
The recent fall in crude oil prices from $75 per barrel to about $60 per barrel in the international market has led to some value buying. This trend is also prompting investors to close their positions in the Indian equity market, Anshul Jain, Head of Research at Lakshmishree Investment and Securities, said.