Both indices crashed over 1% amid the intensifying Iran-US conflict.
Stock market crash today: BSE Sensex and Nifty50, the Indian equity benchmarks tanked in morning trade on Monday as persistently high crude oil prices and a spike in US bond yields added to investors’ woes.
Both indices crashed over 1% amid the intensifying Iran-US conflict.While Sensex crashed over 1,000 points, Nifty50 went below 22,850. At 10:40 AM, Nifty50 was trading at 22,835.15, down 305 points or 1.32%. BSE Sensex was at 72,909.34, down 986 points or 1.33%.The selloff also erased nearly Rs 6 lakh crore from the combined market capitalisation of BSE-listed companies, taking it down to around Rs 476 lakh crore.Every one of the 30 Sensex stocks was trading in negative territory. Bajaj Finance, Kotak Mahindra Bank and HDFC Bank led the decline. The weakness was not restricted to large-cap stocks. The Nifty Smallcap 100 and Nifty Midcap 100 indices also declined by more than 1% each.Indian equities were also tracking the broader weakness across several Asian markets, where stocks came under pressure amid the surge in oil prices.
South Korea’s Kospi declined more than 2%, while China’s Shanghai Composite dropped over 1.7%. Japan’s Nikkei, however, posted muted gains.
Why is stock market crashing today?
Iran-US conflict escalatesTensions between Iran and the US intensified after US President Donald Trump rejected Iran’s proposal for a seven-day ceasefire along with the reopening of the Strait of Hormuz.Speaking to reporters on Saturday, Trump said, “I reject this agreement.
They want an agreement to be made under which the Strait of Hormuz is immediately opened, because they are severely failing.”Iranian President Masoud Pezeshkian, meanwhile, said the country would remain firm and would not back down in the face of the US and Israel.Oil prices jumpThe latest developments in the Middle East triggered another sharp rise in crude prices, with oil gaining 2% and moving close to $107 per barrel as markets factored in the possibility of further disruption to shipments.
JPMorgan said it could no longer clearly assess where oil prices were headed and, for the first time since the Iran war began in February, said it did not have a defined baseline scenario for the market.Bond yields soarUS bond yields continued their climb, reaching fresh multi-year highs and adding another layer of pressure on equities. The yield on the benchmark US 10-year Treasury note moved further above 5.2%, its highest level since 2004.
The 30-year US bond yield also crossed 5.5%, while the yield on two-year Treasury notes, which generally moves alongside expectations of Federal Reserve rate hikes, rose above 4.9%.Higher bond yields generally increase the attractiveness of debt markets for investors, which can put additional pressure on riskier assets such as equities.Rupee tumblesThe Indian rupee weakened by 14 paise to 95.89 against the US dollar in early trading.
Forex traders are increasingly concerned about the currency breaching the psychologically important 96 level against the dollar, with the rupee facing pressure from elevated oil prices, higher US Treasury yields and a stronger dollar.“Volatility in crude and gold, along with a rise in the dollar, limited the rupee’s ability to sustain gains. Going ahead, currency movement is likely to remain range-bound amid global commodity and dollar volatility.
Rupee range can be seen between 95.50-96.50,” said Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities.FII outflowsForeign investors continued to sell Indian equities on Friday, offloading shares worth a net Rs 3,694 crore, according to provisional NSE data.VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said the shift in FPI flows towards the negative side after positive inflows in July and August had become visible earlier this month. He said the selling trend has continued, with total equity outflows through exchanges reaching Rs 25,682 crore so far this month.(Disclaimer: Recommendations and views on the stock market, or any other asset classes or personal finance management tips given by experts and analysts are their own. These opinions do not represent the views of The Times of India.)
