Indian stock markets crashed on Tuesday, with Sensex and Nifty falling nearly 2% to extend sharp losses as rupee hitting fresh lifetime low, elevated oil prices and other factors spooked investors.
Sensex tumbled over 1,456 points to close at 74,559, while Nifty plunged over 436 points to end the session at 23,379. This came as India VIX, which measures volatility in markets, jumped 4% to 19.26. The losses wiped off more than Rs 10 lakh crore from the total market capitalisation of all companies listed on BSE, pulling it down to Rs 457 lakh crore.
IT stocks including Tech Mahindra, HCL Tech, TCS and Infosys were among the top losers on Sensex, falling 3-4% as new launch by OpenAI retriggered AI-led disruption worries. Adani Ports and Titan shares also fell around 4% to join the IT heavyweights on the list of top losers. Bucking the trend, NTPC, SBI and Bharti Airtel shares closed in the green with marginal gains.
The bearish market sentiment was broad-based, with Nifty Smallcap 100 and Nifty Midcap 100 indices crashing 2.5-3% to underperform benchmark indices.. Sectorally, Nifty IT and Nifty Realty declined around 4% to emerge as the top losers, while all sectoral indices closed in the red. Around 2,726 stocks declined and 590 stocks advanced, while 65 remained unchanged on NSE.
Domestic equities remained under pressure, with the rupee weakening to record lows amid rising crude oil prices linked to escalating tensions in West Asia along with FII outflows, said Vinod Nair, Head of Research, Geojit Investments. He highlighted that the decline was broad-based, led by IT and realty stocks. IT stocks underperformed as concerns grew around AI-driven pricing pressure and potential disruption following recent enterprise adoption initiatives by OpenAI, he said.
“Investors are also awaiting the upcoming domestic CPI data to assess the spillover impact of the ongoing US–Iran conflict. Near-term market sentiment is likely to stay volatile due to crude and currency concerns, though any signs of geopolitical easing could support relief rallies, aided by resilient domestic fundamentals and stable institutional flows,” the analyst further said.
Here are the key factors pushing markets down today.
1) Trump rejects 'garbage' peace proposal from Iran
US President Donald Trump said a ceasefire with Iran was "on life support" as the latter rejected a US proposal to end the war and stuck to a list of demands which Trump described as "garbage". Iran has demanded an end to the war on all fronts, including Lebanon where US ally Israel is fighting against Iran-backed Hezbollah militants. Iran also demanded its sovereignty over the Strait of Hormuz, compensation for war damage, and an end to the US naval blockade, among other conditions.
Trump said Iran's response threatened the status of a ceasefire that began on April 7. "I would call it the weakest right now, after reading that piece of garbage they sent us. I didn't even finish reading it," he told reporters. These developments further faded hopes for a sooner end to the conflict in the Middle East.
2) Oil prices above $107
Oil remained soared as fading hopes for a sooner end to the Middle East conflict spurred worries over further prolonged closure of the Strait of Hormuz, a narrow 33-kilometre waterway connecting the Persian Gulf with the Gulf of Oman that handles over 20% of the world’s daily oil and gas shipments.
Brent crude gained around 3% to hover above $107 per barrel on Tuesday afternoon, while WTI Crude also gained nearly 3% to $101 per barrel.
3) Rupee hits fresh all-time low
Indian rupee dropped to a fresh all-time low on Tuesday as investors worried over the threats to the ceasefire and rally in oil prices, deepening worries over the economic hit to a net energy-importing economy. The Indian currency fell to 95.63 per dollar, down from its previous close of 95.31 and breaching its previous all-time low of 95.4325 hit last week.
4) Bond yields soar
US Treasury yields inched higher up amid the latest geopolitical developments. The yield on benchmark US 10-year notes rose to 4.423% while the 30-year bond yield rose to 4.994%. The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose to 3.962%. Rising bond yields typically make bonds more attractive to investors, which in turn can lead to some downturn in markets.
5) FII selling continues
Foreign investors continued to remain net sellers of Indian equities, net selling shares worth Rs 8,438 crore on Dalal Street on Monday, according to data on NSE. This marked the fifth consecutive session of selling by foreign investors. While this does not reflect their behaviour today, persistent FII selling dampens sentiment.
6) Nifty F&O expiry day
Tuesdays mark weekly expiry for Nifty F&O contracts. Usually, such days see heightened volatility as traders often try to adjust their positions. “In today’s session, Nifty is expected to find immediate support near the 23550–23600 range, where some buying interest or recovery could emerge. However, any pullback rally is likely to face selling pressure near the 23800 mark, which has now turned into an important resistance level. Overall, the broader strategy remains “sell on rise,” though a short-term contra trade can be considered near the 23500–23550 support zone for an intraday recovery bounce,” said Vatsal Bhuva, Technical Analyst at LKP Securities.
(With inputs from agencies)
(Disclaimer: Recommendations, suggestions, views and opinions given by experts are their own. These do not represent the views of The Economic Times)
