There was a huge fall in the Indian stock market on Monday. Sensex fell by more than 1,837 points and Nifty closed near the important level of 22,500. Investors' confidence weakened due to increasing tension between Iran and America, weakening rupee and other reasons. The special thing is that for the first time after May 2022, Sensex is being seen at the level of 72 thousand points. This means that the stock market is at its lowest level in almost two years. Due to which stock market investors suffered a loss of about Rs 14 lakh crore. If we look at the data, in the month of March there has been a decline of about 8600 points i.e. about 11 percent in Sensex. The special thing is that today i.e. on March 23, 6 years have passed since the first time in India there was a decline in the stock market due to Covid. It is not a coincidence that even after 6 years there has been a big decline in the stock market. Let us also tell you what kind of figures have been seen in the stock market.
Bombay Stock Exchange's main index Sensex fell by 1,837 points to 72,696. Whereas during the trading session the Sensex fell by 1,974.52 points to 72,558.44 points. Which was the lowest level after May 23, 2024. On the other hand, the main index of National Stock Exchange Nifty slipped 50,602 points and closed at 22,513. During the trading session, Nifty fell by about 643 points and reached its lowest level of several months at 22,471.25 points. In the month of March, Sensex has seen a fall of 8,590.8 points. Whereas Nifty has fallen by 2,666 points i.e. about 11 percent in the month of March. Due to this sharp selling, there was a loss of more than Rs 14 lakh crore from the total market capitalization of all the companies listed on BSE, due to which it came down to Rs 414.77 lakh crore.
Shares of Titan and Trent were the biggest losers in the Sensex, as both these shares of Tata Group fell by about 6%. After this, shares of UltraTech Cement, Bharat Electronics (BEL), Indigo and Tata Steel also fell by about 5%. At the same time, HCL Tech reversed this trend and was the biggest gainer with a gain of about 2%. All sectoral indices on NSE closed in the red. Nifty Consumer Durables, Nifty Metal and Nifty Realty indices were the biggest losing sectoral indices, falling about 5% on Monday. In the stock market, about 3,008 shares declined, while 332 shares advanced and 80 shares closed without any change. Coincidentally, today's massive market fall comes on the sixth anniversary of the infamous fall of March 23, 2020, when the Nifty 50 fell 13% in a single day. There was a huge fall in the stock market that day because the Indian government had imposed a lockdown in the entire country to stop the spread of the COVID-19 virus.
The ongoing war between Iran and America-Israel intensified this weekend. While missile exchanges between these countries continued, threats from their top leaders raised concerns of worsening conflict in the oil-rich Middle East. US President Donald Trump said he has set a Monday deadline for Iran, and warned that if Tehran does not fully reopen the Strait of Hormuz within 48 hours, the US could attack Iran's power plants. In response, Iran warned that if the US followed through on its threat, it would target energy and water infrastructure in the Gulf region. This war has now entered its fourth week, although there was some hope of some diplomatic solution in between, which could not be fulfilled.
Oil prices remained high as the war between Iran and the US-Israel escalated this weekend. On Monday, Brent crude increased to $ 113 per barrel. Prices have surged since the conflict began in the oil-rich Middle East, effectively closing the Strait of Hormuz. More than 20 percent of the world's oil supply passes through the Strait of Hormuz, which connects the Persian Gulf to the Gulf of Oman and the Arabian Sea. After briefly allowing ships to pass through the vital waterway, Iran has now threatened to close the Strait of Hormuz “indefinitely” if the US threatens to bomb Iranian energy facilities. Due to this, the period of rising oil prices started again.
The Indian rupee continued its sharp decline against the US dollar, hitting its all-time low on Monday due to rising oil prices, continued FII selling and other factors. The Indian currency fell below 94 against the US dollar today, breaching its previous low of 93.7350 set on Friday. Jatin Trivedi, VP Research Analyst, Commodity and Currency at LKP Securities, said the rupee, which is one of the currencies most affected by rising oil prices, has weakened by about 3 per cent since the war in the Middle East started.
India's import bill is expected to increase significantly due to continued rise in crude oil prices, which will continue to put pressure on the domestic currency. Macro environment still not good for rupee; Higher energy costs and continued demand for the dollar are having a negative impact on market sentiment. Unless crude oil prices fall significantly, the rupee is likely to remain under pressure. Analysts expect the rupee to trade in a weak range of 93.0094.25 against the US dollar in the coming times.
Since the start of the war in the oil-rich Middle East, foreign investors have been selling Indian stocks heavily amid global risk-off sentiment in the markets. According to NSE data, FIIs continued their selling for the 16th consecutive session on Friday and sold Indian shares worth Rs 5,518 crore. Although it does not reflect today's activity, continuous outflows in the last few sessions have had a negative impact on investor sentiment.
On Friday, 10-year US Treasury yields rose more than 10 basis points to above 4.4%, the highest level in almost a year. Meanwhile, the two-year US Treasury yield, which is most sensitive to expectations of a rate cut by the Federal Reserve, rose to 3.93%. A rise in bond yields makes government securities more attractive than equities, which may put pressure on stock markets.
Globally, stock markets fell drastically, and India's Dalal Street was no exception. Asian markets fell sharply on Monday, with South Korea's Kospi falling 7%. Japan's Nikkei fell nearly 4% and Hong Kong's Hang Seng fell 3.6%. Wall Street closed sharply lower on Friday, with the tech-heavy Nasdaq falling more than 2%. The S&P 500 fell more than 1.5%. European markets also fell today, with Germany's DAX, France's CAC and the UK's FTSE each falling about 2%.
State-run oil marketing companies (OMCs) on Friday announced that industrial diesel prices will be increased by 25 per cent, or about Rs 22 per litre, to partially compensate for rising crude oil prices. This increase in the prices of industrial diesel is likely to affect many companies, while the rates of retail diesel will remain the same. According to Nomura, Indian Railways, state transport undertakings, mining companies, infrastructure and construction companies, manufacturing units, captive power plants and telecom towers are the main users of industrial diesel. The company said that as per our estimates and discussions with the company management, the share of industrial diesel in the total diesel sold in the country is about 13%.
Vinod Nair, head of research at Geojit Investments, said the sharp decline in domestic markets mirrored the weakness seen in Asian markets amid rising tensions in the Middle East and concerns about possible disruptions in global energy supplies. He further said, "Investor sentiment turned cautious after Trump's 48-hour ultimatum to Iran over the Strait of Hormuz. Rising global bond yields indicated rising inflation and fiscal concerns, while the rupee's fall to record low put further pressure on the markets and FII money started flowing out. Massive selling was seen across all sectors, with metals, realty and consumer durables the biggest losers." And mid-cap and small-cap stocks also underperformed. In the short term, markets will remain risk-averse until there is more clarity on the easing of tensions, although this decline also offers some selective long-term opportunities for investors.
