Stock market crash today: Nifty50 and BSE Sensex crashed in trade on Monday amidst rising Middle East tensions and global market turmoil, with impact on crude oil prices and trade in focus. While Nifty50 closed below 24,900, BSE Sensex ended down over 1,000 points. Nifty50 closed the trading session at 24,865.70, down 313 points or 1.24%. BSE Sensex ended at 80,238.85, down 1,048 points or 1.29%.Analysts warn that sectors sensitive to crude prices such as oil marketing companies, paints, tyres, aviation and chemicals could face pressure on margins due to rising input costs. In contrast, upstream oil producers including ONGC and Oil India may gain from improved realisations, while defence stocks such as HAL and BEL could witness positive sentiment.
Why did stock market crash today? Top reasons
1) Tensions intensify in the Middle EastThe conflict in the Middle East deepened following the killing of Iran’s Supreme Leader, Ayatollah Ali Khamenei. The 86-year-old leader was reportedly killed over the weekend in missile strikes attributed to the United States and Israel. Four of his family members, including his daughter and a grandchild, also lost their lives in the attack.In response, Iran launched retaliatory strikes across key parts of the region, triggering widespread hostilities across the oil-producing Middle East.“The uncertainty related to the war in West Asia will loom large over the market in the near-term,” said VK Vijayakumar, Chief Investment Strategist, Geojit Investments. Kranthi Bathini of Wealth Mills Securities said the expansion of tensions in the Middle East, particularly in the UAE, had caught many by surprise and is likely to weigh on financial markets in the short to medium term.2) Oil prices jump sharplyCrude oil prices climbed significantly amid fears of supply disruptions. Brent crude advanced 6 per cent to $77.08 per barrel, while WTI crude gained 5.5 per cent to $70.71 per barrel as of 9.30 am. Over one-fifth of global oil supply moves through the Strait of Hormuz, which links the Persian Gulf with the Gulf of Oman and the Arabian Sea. Intensified missile activity in and around the region has heightened concerns about possible supply constraints, pushing prices higher.Barclays, the UK’s second-largest bank, revised its Brent crude forecast upward to $100 per barrel on Saturday. “Oil markets might have to face their worst fears on Monday. As things stand right now, we think Brent could hit $100 (per barrel), as the market grapples with the threat of a potential supply disruption amid a spiraling security situation in the Middle East,” the bank said in its report.3) Rupee comes under pressureThe Indian rupee fell sharply, breaching the Rs 91 per dollar level for the first time in a month, as escalating tensions between Iran and the US-Israel alliance dampened risk appetite and fuelled a surge in crude oil prices.“It is fair to assume that the rupee will open weak, most likely closer to Rs 91.50 per dollar. But RBI will also be present in the market to prevent a sharp fall so one can expect the rupee in a way not to weaken below Rs 92 per dollar,” said Anshul Chandak, head of treasury at RBL Bank.4) Heavy FII outflows weigh on moodForeign institutional investors continued to offload Indian equities in the previous session, with net sales amounting to Rs 7,536 crore on Friday, as per NSE data. Although this does not indicate their positioning for the current session, sustained FII selling has weighed on overall market sentiment.In contrast, domestic institutional investors provided support, purchasing shares worth Rs 12,293 crore on a net basis in the last trading session.What should investors do?Amid rising nervousness in domestic markets, market experts have urged investors to stay calm. “Experience tells us that panic selling during a crisis is the wrong strategy,” said VK Vijayakumar, Chief Investment Strategist, Geojit Investments. He advised market participants to avoid hasty exits and instead monitor how the situation unfolds.“Data from crises during the last many decades tells us that an event like the present crisis will not have any impact on the market six months later. This is the takeaway from the market behaviour after the recent crises like the Covid crisis, Russia-Ukraine war and the Gaza conflict. The ongoing West Asian crisis is unlikely to be different. However, since a war can spring unexpected surprises, investors have to be cautious,” he said.According to the analyst, phases of market weakness could be utilised to gradually build positions in fundamentally strong stocks, particularly in domestic consumption-driven sectors such as banking, automobiles, capital goods and defence.(Disclaimer: Recommendations and views on the stock market, other asset classes or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India)
