Due to US-Iran tension, rise in crude oil prices and selling in pharma-IT stocks, Sensex fell by more than 700 points, while Nifty reached near 24,000.
Stock Market Crash Reason: There was huge pressure in the domestic stock market on Thursday. Despite the rise in most of the Asian markets, the impact of increasing tension between America and Iran was clearly visible on the Indian market. Due to this, both Sensex and Nifty closed in the red. Sensex fell 715 points and closed at 76755, while Nifty also fell 191 points and closed below 24000. Due to the fall on Wednesday, investors lost Rs 4 lakh crore in one fell swoop.
Investors were defrauded of Rs 4 lakh crore
Earlier on Tuesday, July 21, the total market cap of all stocks listed on BSE was ₹4,84,21,297.62 crore. At the same time, on July 22, it decreased to ₹ 4,80,11,438.92 crore. That means investors’ wealth decreased by ₹ 4,09,858.70 lakh crore in a single day. Concerns over US tariffs on the pharma sector and selling in IT stocks weakened market sentiment. There was selling pressure in midcap and smallcap stocks also. Let us know the 4 biggest reasons for the decline in the stock market.
1- Highest pressure on Pharma Stocks
Today the maximum weakness in the market was seen in the pharma sector. The main reason for this was the new tariff policy of US President Donald Trump. According to the report, shares of Indian pharma companies came under pressure due to the fear of generic medicines also being included in the US tariff policy. This also impacted the Nifty Pharma index, which was seen trading with a decline of more than 1%.
2- Increase in selling in IT Stocks
Indian IT stocks also witnessed a sharp decline. Due to the rise in Artificial Intelligence (AI) related stocks globally, the priorities of investors seemed to be changing, which put pressure on the shares of Indian IT companies. Its effect was also visible on the Nifty IT index, which fell by more than 1%.
3- Banking Stocks also appeared under pressure
Extensive selling was also seen in the banking sector. Nifty PSU Bank index fell more than 2%. The Nifty Private Bank index also recorded a decline of more than 1.5%. Weakness in banking stocks also added to the market’s decline.
4- Impact of US-Iran War on the market
The impact of the ongoing tension between America and Iran was visible on the global markets as well as the Indian market. According to the report, America carried out air strikes on Iran for the 11th consecutive night. Military operation centres, aircraft hangars and drone storage sites were targeted in these attacks. After these incidents, there are no signs of easing of tension between Washington and Tehran. Due to this, the confidence of investors weakened and selling in the market increased.
5- Sharp jump in Crude Oil Price
The increasing tension between America and Iran also affected the prices of crude oil. The price of global benchmark crude oil rose to beyond $ 93 per barrel. India imports most of its crude oil needs, so the rise in oil prices increased the concern of investors and its effect was also visible on the stock market.