The process of selling continues in the domestic stock market. After Monday’s fall, major benchmark indices were seen trading in the red on Tuesday. In early trade, Sensex fell 525.44 points to 75,489.84, while Nifty fell 164.5 points to 23,651.35. Infosys and Asian Paints fell by up to 3% in early trade.
The Indian stock market witnessed a huge decline in early trade on Tuesday due to deepening geopolitical tensions in West Asia and rising crude oil prices. The continuous withdrawal of foreign funds and the crisis over peace talks between America and Iran have weakened the confidence of investors.
Market condition: Sensex and Nifty boom
In early trade on Tuesday, the Bombay Stock Exchange (BSE) Sensex plunged 525.44 points to 75,489.84. Similarly, the Nifty of the National Stock Exchange (NSE) slipped 164.5 points to 23,651.35. Earlier on Monday too, huge chaos was seen in the market, when Sensex closed with a huge loss of 1,312.91 points and Nifty closed with a huge loss of 360.30 points.
The rupee fell 35 paise to a record low of 95.63 against the US dollar in early trade on Tuesday after US President Donald Trump threatened to compromise the ceasefire with Iran and dashed hopes of a deal, leading to a surge in crude oil prices.
Main reasons for the decline: Trump’s statement and expensive crude
Crude oil prices and global tensions are mainly responsible for this decline:
- Boiling in Crude Oil: In the international market, Brent crude oil has reached a high of $ 105.2 per barrel with a jump of 0.93 percent.
- Trump rejected peace proposal: US President Donald Trump has rejected Iran’s peace proposal, calling it garbage. Trump has said that the ceasefire is at its weakest level and is now on life support.
- Selling by foreign investors: Increasing pressure on the market, foreign institutional investors made huge sales of shares worth Rs 8,437.56 crore on Monday.
According to Ponmudi R, CEO of Enrich Money, the ongoing US-Iran conflict is affecting global sentiment, leading to reduced risk appetite and high volatility in the stock market.
Sectoral impact: Tech stocks suffer the most
Among the 30 major Sensex companies, the biggest decline was seen in IT and financial stocks. TCS, Infosys, Tech Mahindra, HCL Tech, Adani Ports and Bajaj Finserv were the biggest losers. On the other hand, amid this all-round decline, shares of Bharti Airtel and NTPC gained and gave minor relief to the investors.
trend of global markets
A mixed trend was seen in Asian markets. South Korea’s Kospi and Shanghai’s composite index were trading in the red with losses. In contrast, Japan’s Nikkei 225 and Hong Kong’s Hang Seng index were in the lead. US markets closed in positive territory on Monday.
Experts believe that until a clear picture of the end of the conflict in West Asia emerges, there will be uncertainty in the minds of investors. The duration of the conflict and rising crude oil prices will play an important role in determining the direction of the market in the times to come.