The five-day rally in the stock market has come to a halt. Sensex has fallen by more than 1012 points. Nifty has fallen by more than 250 points and reached near 23,740. The main reasons for this decline in the market were the rise in crude oil prices, increased uncertainty due to Iran-Israel tension, weakness in GIFT Nifty, fall in rupee and weakness in Asian markets. Talking about sectoral indices, selling was seen in auto, banking, FMCG and realty. Whereas, light buying was seen in metal, IT and pharma.
The stock market has halted its five-day rally. The Sensex and Nifty saw sharp declines today. The Sensex slipped 1,012 points to trade at 76,550, while the Nifty fell more than 250 points to trade near 23,740.
Regarding Nifty’s sectoral indices, selling pressure was seen in Nifty Auto, Nifty Financial Services, Nifty FMCG, Banking, and Realty. Meanwhile, buying pressure was seen in Metals, Pharma, and IT. Five key reasons are behind today’s sharp decline in the stock market.
Crude oil fire
Despite a ceasefire between Iran and Israel, uncertainty has once again emerged between the two countries, leading to the closure of the Strait of Hormuz. As a result, Brent prices have risen 2 percent to over $96. WTI crude prices have also risen by $2.60.
Tensions continue between Iran and Israel
A ceasefire was reached between Iran and Israel, but tensions have once again flared between the two countries. Iran claims the US has acted ineffectively and violated its commitments despite the ceasefire. The US, meanwhile, says Iran has adopted a cautious stance despite bilateral talks. According to a Moneycontrol report, investors remain confused about the ceasefire. This led to a 140-point drop in the Nifty index this morning.
Rupee depreciates
Despite the RBI’s efforts, the Indian rupee has seen a decline. In early trade on Thursday, the Indian rupee fell by 17 paise to 92.71 per dollar. According to a Moneycontrol report, foreign currency traders said that the situation in the Middle East is fragile and the market is adopting a wait-and-watch approach instead of taking a strong stance. On Wednesday, the Indian rupee closed at 92.54 against the dollar. The Indian rupee witnessed a sharp rise against the dollar on April 2. On April 2, the rupee rose by about 2% to reach 92.94 per dollar, which was the biggest single-day gain since September 2013.
Weakness in global markets
Global markets are showing weakness today. Asian markets, including South Korea’s Kospi, Japan’s Nikkei, China’s SSE Composite, and Hong Kong’s Hang Seng, all traded lower. The Kospi, in particular, fell nearly 2%. However, these markets had seen a sharp rebound in the previous trading session. Meanwhile, US and European markets closed with gains, leading to mixed global cues.
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