The fear of war in Western Asia and the news of Khamenei’s death led to a huge fall in the Indian stock market. Sensex-Nifty fell by more than 1%, crude oil became costlier and rupee crossed 91 against the dollar.
A huge decline was seen in the Indian stock market today amid the war situation in Western Asia. The news of the death of Iran’s supreme leader Ayatollah Ali Khamenei created an atmosphere of fear in the market and it fell badly. Both Sensex and Nifty fell by more than one percent. As soon as trading started, Sensex fell by 2,743 points and Nifty by 519 points. Within a few minutes, Rs 7.8 lakh crore was wiped out from investors’ wealth. However, by afternoon the Sensex made some recovery and was trading below 80,000, down by over 1,300 points.
Big reasons for falling the market
1. Khamenei’s death and fear of war: The biggest shock to the market was the news of the death of Iran’s supreme leader Ayatollah Ali Khamenei in a missile attack by America and Israel. After this, Iran started retaliating, creating a battlefield in the oil-rich Gulf region.
2. Crude oil prices on fire: As the war situation became serious, the prices of crude oil started skyrocketing in the international market. The price of Brent crude increased by 6% to $ 77.08 per barrel. Missile attacks near the Strait of Hormuz, through which 20% of the world’s oil passes, have increased the risk of oil supply disruptions. Barclays Bank has warned that oil prices could exceed $ 100 per barrel.
3. Rupee falls badly: There was a big fall in the value of Indian Rupee due to increase in oil prices. For the first time in a month, the rupee crossed the level of 91 against the dollar. Economic experts believe that the rupee may go down further, but the Reserve Bank may intervene in it.
4. Foreign investors left: Last Friday alone, foreign investors sold shares worth Rs 7,536 crore. This broke the confidence of the market. However, domestic investors tried to take control of the market by buying shares worth Rs 12,293 crore.
Which stocks fell, which rose?
Major stocks like IndiGo, L&T, Adani Ports and Asian Paints fell between 2 to 4 per cent. At the same time, Bharat Electronics shares saw a rise of about 1 percent on the hope of benefiting the defense sector in the war environment. There was heavy selling in shares of realty, auto and IT sectors also.