The stock market witnessed a decline for the fourth consecutive day.
Indian stock markets fell badly on Tuesday. Sensex and Nifty dropped by about 2 percent, which increased the loss further. The reason for this was the rupee reaching its lowest level ever, rising oil prices and other such reasons which made investors nervous. Sensex fell by more than 1,456 points and closed at 74,559, while Nifty fell by more than 436 points and closed at 23,379. This came as India Vix, which measures market volatility, rose 4 per cent to 19.26. Due to this decline, more than Rs 10 lakh crore was wiped off from the total market capitalization of all the companies listed on BSE, due to which it came down to Rs 457 lakh crore.
Big fall in these shares
IT stocks like Tech Mahindra, HCL Tech, TCS and Infosys were among the biggest fallers in the Sensex. They fell 3-4 percent as a new launch of OpenAI again raised concerns about the changes caused by AI. Shares of Adani Port and Titan also fell by about 4 percent and joined the big IT companies in the list of stocks that fell the most. Contrary to this trend, shares of NTPC, SBI and Bharti Airtel closed in the green with slight gains.
Highest decline in these sectors
The atmosphere of decline in the market was visible everywhere. Nifty Smallcap 100 and Nifty Midcap 100 indices fell 2.5-3 per cent and underperformed the benchmark indices. Sector-wise, Nifty IT and Nifty Realty emerged as the biggest losers, falling around 4 per cent each, while all other sectoral indices closed in the red. About 2,726 stocks fell and 590 stocks rose on the NSE, while there was no change in 65 stocks.
What do experts say?
Vinod Nair, head of research at Geojit Investments, said domestic stock markets appeared under pressure. The reason for this was the rupee reaching a record low, increase in crude oil prices due to increasing tension in West Asia and withdrawal of money from foreign institutional investors. He said that this decline was visible everywhere, in which IT and realty stocks were at the forefront. He said IT stocks underperformed as concerns grew about pricing pressure from AI and potential changes following the new initiatives OpenAI recently launched for companies.
How will be the future trend?
Investors appeared to be waiting for the upcoming domestic CPI data. So that they can assess the impact of the ongoing conflict between America and Iran. The analyst further said that due to concerns related to crude oil and currency, the market mood is likely to remain volatile in the near future. If there is any reduction in geopolitical tensions, the market may see a comfortable rally on the back of strong domestic fundamentals and stable institutional investment.
Trump rejected Iran’s 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 has called for an end to the war on all fronts, including in Lebanon, where US ally Israel is fighting Iran-backed Hezbollah fighters. Iran also put forward other conditions such as relinquishing its sovereignty over the Strait of Hormuz, compensation for war damages, and ending the US naval blockade.
Trump said that due to Iran’s response, the situation of ceasefire which started on April 7 is in danger. He told the journalists that after reading the useless paper that they have sent us, I would say that it is in its weakest position right now. I didn’t even read it completely. These developments have further dimmed the hopes of an early end to the conflict in the Middle East.
Oil prices cross $107
Oil prices continued to rise as concerns over a prolonged closure of the Strait of Hormuz increased as hopes for an early end to the Middle East conflict diminished. The Strait of Hormuz is a narrow 33-kilometer waterway that connects the Persian Gulf to the Gulf of Oman, and through which more than 20 percent of the world’s daily oil and gas shipments pass. On Tuesday afternoon, Brent crude increased by almost 3 percent and reached above $ 107 per barrel, while WTI crude also increased by almost 3 percent and reached $ 101 per barrel.
Rupee at its lowest ever level
The Indian rupee fell to its lowest ever level on Tuesday as investors remained worried about ceasefire threats and rising oil prices. This deepened concerns about the economic shock to an economy that is a net energy importer. The Indian currency fell to 95.63 per dollar, down from its previous close of 95.31, and also breached its all-time low of 95.4325 set last week.
rise in bond yields
US Treasury yields saw a slight rise amid recent geopolitical developments. Yields on benchmark US 10-year notes rose to 4.423%, while 30-year bond yields 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.
