Sensex fell 1800 points
Sensex Opening Bell: The market capitalization of all the companies listed on BSE fell by Rs 5.63 lakh crore to Rs 469.23 lakh crore. Tensions have increased in West Asia after Iran fired a ballistic missile at Israel earlier this week. Due to this, selling is seen in the market.
There was a sharp sell-off in the domestic stock market on Thursday. During this time, the Sensex and Nifty fell by more than two percent. This fall in the market came due to investors being cautious after the tension in West Asia. The domestic stock market did not like Thursday. On the day of expiry of futures trading, the Sensex and Nifty slipped by two percent each. At 2:10 pm, the Sensex was seen trading at 82,455.08, slipping 1,811 points or 2.15%. On the other hand, the Nifty also fell 554 points or about 2.15% to reach 25,242. During this time, investors in the market suffered a loss of about Rs 11 lakh crore.
Tensions in West Asia may lead to rise in crude oil prices
The market capitalisation of all the companies listed on the BSE fell by Rs 5.63 lakh crore to Rs 469.23 lakh crore. Fears of escalation of tensions in West Asia have increased after Iran fired a ballistic missile at Israel earlier this week. If this conflict intensifies, oil supplies from the region may be disrupted. Crude oil prices rose on Thursday. The rise in oil prices is negative for commodity importing countries like India, as crude oil contributes significantly to the country’s import bill.
Nifty Oil & Gas index weakened by 1.2%
Talking about Sensex stocks, shares of Reliance Industries, HDFC Bank, ICICI Bank, M&M, L&T and Bharti Airtel were most responsible for the index’s slide. At the same time, JSW Steel and Tata Steel were the only stocks that opened with gains. The Nifty Oil & Gas index fell more than 1.2% in early trade due to concerns over the growing conflict in the Middle East. Hindustan Petroleum, IOC and GSPL were the biggest laggards in the index. Meanwhile, India VIX jumped 8.9% to 13.06.
These were the main reasons for the fall in the domestic stock market
Conflict between Iran and Israel
The growing tension between Iran and Israel in West Asia is a cause of concern for the markets around the world. According to reports, after the attack by Iran, the Israeli army has confirmed the death of eight of its soldiers in South Lebanon. This includes a team commander. In such a situation, in the coming time, Israel can intensify counter attacks to surround Iran, Hezbollah and Hamas. If this situation arises, it will affect the production of crude. Which will affect the market all over the world. In view of these concerns, investors are avoiding new purchases in the market.
Increase in crude oil prices
The increased tension in West Asia has started affecting the prices of crude oil. Brent crude has crossed the price of $ 75 per barrel. Best Texas Intermediate Crude also reached $ 72. Both the indices have fallen by more than five percent in the last three days. This had a negative impact on the market, as India is an oil importing country and crude oil is a significant part of the import bill.
Tightening of futures trading rules
SEBI has recently approved changes in the rules of futures trading in its board meeting. Market regulator SEBI’s recent decision to tighten rules in the futures and options (F&O) segment also contributed to the decline in equity markets today. According to analysts, these new measures, which include making weekly expiry one day on every exchange and increasing the contract size, may disappoint retailers. This may reduce trading. This uncertainty about trade dynamics has increased investor concern. Which increased the downward pressure in the market amid widespread geopolitical tensions.
China effect
Indian investors are also worried about the strength in China’s stock market. China’s stock market has performed poorly in recent years. After the announcement of economic stimulus measures by the Chinese government last week, analysts have predicted a continued rise in Chinese stocks. Which is promoting capital outflow from India. The SSE Composite Index rose 8% on Tuesday and gained over 15% in the past week. As a result, foreign institutional investors pulled out Rs 15,370 crore from Indian equities in the last two trading sessions.
Rupee weakens 11 paise against dollar
Amid rising crude oil prices and concerns over escalating tensions in the Middle East, the domestic stock markets remained negative, which also led to a decline in the rupee. The rupee fell 11 paise to 83.93 against the US dollar in early trade on Thursday (October 3, 2024). According to currency traders, the Indian currency came under pressure due to continued outflow of foreign investment from the capital markets and strengthening of the US currency.
