Why Are Stock Markets Plummeting? Insights on the Latest Trends
Market Overview Amid Rising Tensions
Mumbai: The benchmark indices of the stock market, Sensex and Nifty, experienced significant declines during Monday's afternoon trading session, primarily influenced by a sharp rise in crude oil prices amid escalating tensions in West Asia.
Initially, the 30-share BSE Sensex dropped by 2,743.46 points, equivalent to a 3.37 percent decrease, reaching 78,543.73. By the afternoon, it was down by 1,633.23 points, or 2.01 percent, trading at 79,653.96.
Similarly, the 50-share NSE Nifty fell by 533.55 points, or 2.11 percent, to 24,645.10 in early trading, later adjusting to a decline of 505.35 points, or 2.01 percent, at 24,674.75.
Among the Sensex constituents, major losers included Larsen & Toubro, Adani Ports, InterGlobe Aviation, Maruti, Asian Paints, and Reliance Industries, while Bharat Electronics and Sun Pharma were the only stocks to gain.
Brent crude, the global oil benchmark, surged by 9.43 percent, reaching USD 79.74 per barrel.
The situation escalated following the death of Iran's Supreme Leader Ayatollah Ali Khamenei, confirmed by Iranian state media after a US-Israeli airstrike in Tehran. In retaliation, Iran launched missiles targeting Israel and neighboring Arab nations.
Asian markets reflected this volatility, with Japan's Nikkei 225 and Hong Kong's Hang Seng index showing declines, while Shanghai's SSE Composite index managed to stay positive.
The US market also closed lower on Friday.
VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, noted, "The uncertainty surrounding the conflict in West Asia will significantly impact the market in the short term. The primary concern is the energy risk stemming from the spike in crude prices."
Data from exchanges indicated that Foreign Institutional Investors (FIIs) sold equities worth Rs 7,536.36 crore on Friday, while Domestic Institutional Investors (DIIs) purchased stocks valued at Rs 12,292.81 crore.
Ponmudi R, CEO of Enrich Money, emphasized that the risks for investors extend beyond energy, stating, "Ongoing regional instability could disrupt trade routes, strain supply chains, and tighten global financial conditions if inflation expectations rise again."
On the previous Friday, the Sensex had already fallen by 961.42 points, or 1.17 percent, closing at 81,287.19, while the Nifty dropped by 317.90 points, or 1.25 percent, ending at 25,178.65.