share market
A huge fall was recorded in the Indian stock market on Wednesday. The increasing tension between Iran and America, new threats from Trump to increase tariffs (import duty) and other reasons spread panic among investors, due to which Sensex and Nifty fell by about 1 percent and their continuous decline continued. The Sensex fell by more than 800 points to the day’s low of 77,384, while the Nifty 50 fell by more than 200 points and went below the 24,000 level. Due to this selling, about Rs 4.66 lakh crore was reduced from the total market capitalization of all the companies listed on BSE, due to which it came down to Rs 4.79 lakh crore.
Pharma stocks witnessed the biggest decline after US President Donald Trump announced a phased tariff plan on imported generic drugs. Under this scheme, drug manufacturers have been given a grace period of two years before the higher duty is implemented. The biggest fall in the Sensex was in IndiGo shares, which fell by more than 3 per cent, while State Bank of India (SBI) shares fell by almost 2 per cent. At the same time, shares of Infosys, Axis Bank, ICICI Bank, UltraTech Cement, Reliance Industries, HDFC Bank, Kotak Mahindra Bank, Sun Pharma and Tech Mahindra fell by more than 1 per cent. On the contrary, shares of Titan, Maruti Suzuki and Eternal saw marginal gains and were trading in the green.
After showing some strength despite selling in the initial sessions, the broader market also fell into the red on Wednesday with a heavy fall. Nifty Smallcap 100 and Nifty Midcap 100 indices fell by about 1 per cent each. As a result, the overall market sentiment turned negative. On NSE, a decline was seen in 2,165 shares and rise in 802 shares, while there was no change in 82 shares.
Amid increasing uncertainty on Dalal Street, India VIX, which measures market volatility, jumped more than 4 percent to 13.14. Sector wise, Nifty Pharma, Nifty Realty and Nifty PSU Bank indices declined by about 2 per cent each and were the biggest falling sectors. At the same time, a decline of more than 1 percent was recorded in Nifty Financial Services, Nifty Bank, Nifty IT, Nifty Private Bank and many other indices. Let us discuss in detail the main reasons for the decline in the stock market…
Tension between Iran and America increased further
On Tuesday, three oil tankers going from Saudi Arabia to Asia changed their course in the Red Sea. It is being said that this was done after threats from Iran-supporting Houthi rebels of Yemen. Due to increasing tensions in the Middle East, shipping through two of the world’s most important energy chokepoints (main routes of energy supply) has been disrupted. Iran has already threatened to block shipping through the Strait of Hormuz, so the Red Sea remains the main alternative route for Saudi Arabia’s millions of barrels of oil per day. Although US Secretary of State Marco Rubio said on Wednesday that America is still ready to resolve the Iran crisis through talks, he also said that Iran is not serious about talks.
Oil crosses 92 dollars
Oil prices reached their highest level in two months on Wednesday due to renewed tensions in the Middle East and fears of further supply disruptions. Brent crude futures were trading above $92 per barrel, while WTI crude futures reached above $85 per barrel. Goldman Sachs has warned in its recent report that if the supply blockage from the Strait of Hormuz continues, the price of Brent crude could rise to $ 120 per barrel, even though it estimates that tensions in the Middle East will eventually subside.
Trump’s tariff stance again in discussion
US President Donald Trump on Tuesday announced a phased tariff plan for imported generic drugs. This created panic among investors, as his repeatedly changing stance on tariffs since assuming office last year has caused a major shock to the market. Under this plan, there will be no tariff on generic medicines coming to America for two years from August 1. After this, there will be 100% tariff on imports for one year and after that 200% levy will be imposed. After this decision, there was a huge fall in pharma stocks. Lupine, Piramal Pharma, Glenmark, Cipla and other pharma stocks fell by up to 4%, bringing the Nifty Pharma index down by about 2%.
Expectations of Fed rate increase
According to a Reuters poll, the US Federal Reserve may keep its main interest rate stable for the rest of 2026. However, a majority of respondents to a separate question about the likelihood of a rate hike this year now rated the likelihood as “high,” a sharp contrast from last month, when a majority viewed it as “low.” Prediction market platform Polymarket also saw a surge in betting on a Fed rate hike later this year. CME Group’s Fedwatch now sees a 27 percent chance of a rate hike.
fall in rupee
On Wednesday, the Indian rupee came under pressure and opened 11 paise lower at 96.36 against the US dollar. The dollar strengthened amid rising crude oil prices and increasing demand for safe-haven assets. Jatin Trivedi, VP Research Analyst, Commodity and Currency at LKP Securities, said rising energy prices have increased concerns about India’s import bill and inflation expectations, while a cautious environment globally has also put pressure on the rupee.
Market participants are now keeping an eye on the US Federal Reserve’s policy decision on July 29, which is expected to provide the next major direction for the US dollar and emerging market currencies. Technically, the rupee is expected to trade in the range of 96.0096.45 in the near future.
Increase in bond yields
US Treasury yields rose, further weakening equity market sentiment. The yield on the benchmark US 10-year note rose to 4.63 per cent, while the yield on the 30-year bond rose to 5.137 per cent. Increasing bond yields generally make bonds more attractive to investors, which may lead to some decline in the market.
Continuous selling by FII
According to preliminary NSE data, foreign investors remained net buyers of Indian equities on Tuesday and bought shares worth Rs 1,650 crore. However, the overall trend has been negative, as FIIs have remained net sellers of Indian equities for four consecutive sessions. In fact, FIIs have made net selling on Dalal Street in five out of the last six sessions. After a long period of buying, he has sold Indian shares worth more than Rs 6,000 crore. Continuous selling by FIIs spoils the sentiment and puts pressure on the stock market.
