Stock Market Crash: Indian stock market benchmarks Sensex and Nifty 50 opened sharply lower on Wednesday, tracking weak global cues after fresh geopolitical tensions in the Middle East unsettled investor sentiment.
The BSE Sensex opened at 77,816.45, against its previous close of 78,180.72. The Nifty 50 began the session at 24,259.55, lower than its previous close of 24,398.70. The Sensex crashed over 400 points within minutes of trade while Nifty slipped below 24,250-mark.
The total market capitalisation of all BSE-listed companies also declined sharply in early trade. The combined market capitalisation fell to Rs 4,78,12,462 crore as of 10:05 AM, from Rs 4,80,20,223.18 crore in the previous session, eroding investor wealth by nearly Rs 2.08 lakh crore within minutes of trading. The sharp decline reflected broad-based selling across sectors.
Why Nifty, Sensex falling today? – Key points
1. Fresh US-Iran tensions
The US launched airstrikes on Iran and reimposed sanctions on Iranian crude exports after attacks on commercial vessels in the Strait of Hormuz.
The latest escalation has increased concerns over the Middle East situation. As a result, markets across the world came under pressure. Indian equities also opened lower due to this factor.
2. Crude oil prices rally
Brent crude climbed above $75 a barrel as fears of supply disruptions through the Strait of Hormuz lifted oil prices.
For India, which imports over 85 per cent of its crude oil requirements, higher oil prices raise the import bill, fuel inflationary pressures, squeeze corporate margins and could weigh on economic growth.
Wall Street ended lower overnight, led by losses in technology and semiconductor stocks. Asian markets also traded cautiously on Wednesday as investors assessed the geopolitical risks and their impact on global growth.
The weak global sentiment spilled over to Indian equities at the opening bell.
4. Gift Nifty signalled a gap-down opening
Gift Nifty had already indicated a weak start for domestic equities.
It was trading around the 24,200 level before the market opened, at a discount of nearly 200 points to the previous close of Nifty futures, signalling a gap-down opening for benchmark indices.
5. Investors jittery as Fed decision on policy looms
Investors are also awaiting results of the US Federal Reserve policy meeting due later today. Global investors have become wary amid Fed uncertainty.