stock market
There was a record decline in the Indian rupee. The rupee reached an all-time low on Tuesday. The Indian currency fell to 95.63 against the dollar, resulting in severe selling in the Indian stock market. It was also in negative when the market opened but after trading for about an hour it suddenly took a dive. Dalal Street’s main index Sensex fell by more than 800 points and there was selling in Nifty too. Due to this, investors suffered a loss of approximately Rs 5 lakh crore.
On Tuesday, Indian stock markets slipped into the red. After yesterday’s heavy fall, Sensex and Nifty suffered further losses as rupee fell to its lowest level, high oil prices and other reasons created panic among investors. At 10:40 am, the Sensex fell more than 800 points to 75,200, while the Nifty fell more than 200 points to below 23,600.
IT stocks suffered huge losses
IT stocks like Infosys, Tech Mahindra, TCS and HCL Tech were the biggest losers in the Sensex. Despite huge weakness in the rupee, it fell by 2-3%. Adani Ports, Maruti Suzuki, Asian Paints, ICICI Bank, Bajaj Finserv, Bajaj Finance, HDFC Bank, Hindustan Unilever and other stocks followed the same path, falling around 1-2% each.
The bearish sentiment in the market was widespread, and Nifty Smallcap 100 and Nifty Midcap 100 indices also slipped into the red. Sectorally, Nifty IT became the biggest loser, falling more than 2%. At the same time, Nifty Metal saw a rise of more than 0.5%. About 1,847 stocks declined and 737 stocks advanced on the NSE, while there was no change in 96 stocks.
Here are some of the main reasons due to which the market has fallen today.
- Trump rejects Iran’s ‘useless’ peace proposal US President Donald Trump said the ceasefire with Iran is “on life support” after Iran rejected a US offer to end the war and stuck to a list of demands, which Trump described as “useless”. Iran also put forward other conditions such as its sovereignty over the Strait of Hormuz, compensation for war damages and ending the US naval blockade.
- Oil prices cross $105- Oil prices remained high as concerns over a prolonged closure of the Strait of Hormuz grew as hopes for an early end to the Middle East conflict diminished. The Strait of Hormuz is a narrow 33 kilometer long waterway connecting the Persian Gulf to the Gulf of Oman, through which more than 20% of the world’s daily oil and gas shipments pass. On Tuesday morning, Brent crude rose by almost 1% and reached above $105 per barrel, while WTI crude also rose by almost 1% and reached $99 per barrel.
- Rupee at its lowest ever level- The rupee fell by 35 paise to reach a record low of 95.63 against the US dollar in early trade on Tuesday. The decline occurred when US President Donald Trump said that the ceasefire with Iran was on ‘life support’ and hopes of any agreement with that country were fading, leading to a huge surge in crude oil prices.
- Rise in bond yield- Amid recent geopolitical developments, there was a slight increase in US Treasury yields. The yield on benchmark US 10-year notes rose to 4.423%, while the yield on 30-year bonds rose to 4.994%. The yield on the 2-year note, which typically moves along with the Federal Reserve’s interest rate expectations, rose to 3.962%. Rising bond yields generally make bonds more attractive to investors, which in turn may lead to some decline in the markets.
- FII selling continues- According to NSE data, foreign investors remained net sellers of Indian equities. On Monday, he sold shares worth Rs 8,438 crore on Dalal Street. This was the fifth consecutive selling session by foreign investors. Although this does not reflect their behavior today, the continuous selling by FIIs spoils the market mood.
