Stock market crash today: Nifty50 and BSE Sensex, the Indian equity benchmark indices, tanked in trade on Friday on global cues. While Nifty50 crashed below 24,550, BSE Sensex tumbled over 1,100 points intraday. Nifty50 ended the day at 24,718.60, down 170 points or 0.68%. BSE Sensex closed at 81,118.60, down 573 points or 0.70%.Stock market indices Nifty and Sensex declined influenced by subdued global markets and increased Brent crude oil prices following Israel’s strike on Iran’s capital, affecting investor confidence.Investors demonstrated caution towards higher-risk investments, concerned about potential escalation between Israel and Iran, alongside foreign fund withdrawals.Within the Sensex portfolio, significant declines were observed in Adani Ports, ITC, State Bank of India, IndusInd Bank, HDFC Bank, Titan, Kotak Mahindra Bank and UltraTech Cement.Conversely, Tech Mahindra, Tata Consultancy Services, Sun Pharma and Maruti showed positive performance.The international oil benchmark Brent crude increased by 7.44 per cent to USD 74.52 per barrel.“Indian equity benchmarks experienced downward pressure, driven by weak global cues and foreign institutional outflows. Market sentiment was notably impacted by heightened geopolitical tensions following Israel’s military strike on Iran, which significantly increased risk aversion among investors. Although India’s CPI for May eased below the RBI’s comfort threshold, offering a positive macro signal, this was largely overshadowed by external headwinds.“Brent crude prices climbed to near USD 76/barrel, their highest this year, raising fears of inflation if tensions persist,” Vinod Nair, Head of Research, Geojit Investments Limited, said.According to exchange data, Foreign Institutional Investors (FIIs) sold equities worth Rs 3,831.42 crore on Thursday.
Why did the stock market fall today? Top Reasons
1) Israeli strike on IranThe market downturn was initiated by Israel’s military operation against Iran early Friday. Israel reported targeting nuclear installations, missile production facilities, and military leadership in what they termed a “preemptive strike” against Tehran’s nuclear weapons development.Israel declared a state of emergency, anticipating potential missile and drone counterattacks.Iranian state media confirmed Hossein Salami’s death, who served as Commander of Iran’s Revolutionary Guards. Israeli sources indicated that several high-ranking Iranian military officials and nuclear researchers were likely casualties.US Secretary of State Marco Rubio described the operation as a “unilateral action” by Israel, stating that the United States was not involved.This development occurs as nuclear negotiations remain unresolved, with the sixth round of US-Iran talks scheduled in Oman on Sunday. Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, stated, “The economic consequences of this Israeli strike can be profound if the attack and counterattack by Iran lingers long.”2) Oil Supply Concerns Drive Price SurgeBrent crude futures rose by $6.29 (9.07%) to $75.65 per barrel at 03:15 GMT, reaching $78.50, its highest since January 27.US West Texas Intermediate (WTI) crude increased by $6.43 (9.45%) to $74.47 per barrel, touching $77.62, the peak since January 21.Both benchmarks recorded their most significant intraday gains since 2022, following Russia’s invasion of Ukraine, which caused energy prices to rise substantially.“Israel has declared that the operation will last several days. Brent crude prices have flared up by around 12% to $78. It can rise further if Iran, in retaliation, closes the straight of Hormuz, severely restricting oil supply,” Vijayakumar said.3) Global Markets Experience Widespread DeclineThe situation in the Middle East, a crucial oil-producing area, introduced additional uncertainty to global markets, which were already affected by US President Donald Trump’s inconsistent trade policies.The MSCI Asia ex-Japan index decreased by 1.1%. US S&P E-mini futures fell 1.7%, Nasdaq futures declined 1.8%, and Europe’s STOXX 50 futures reduced by 1.6%.Key Asian markets showed significant drops: Japan’s Nikkei decreased 1.3%, South Korea’s KOSPI fell 1.1%, and Hong Kong’s Hang Seng declined 0.8%.4) Safe-Haven Assets Gain on Risk AversionHeightened market caution drove investors towards secure investments. The benchmark US 10-year Treasury yields declined to 4.31%, reaching their lowest point in a month.The Swiss franc strengthened by 0.4% to 0.8072 against the dollar, whilst the Japanese yen advanced 0.3% to 143.12. Amidst widespread risk aversion, the dollar index registered a 0.5% increase to 98.131.(Disclaimer: Recommendations and views on the stock market and other asset classes given by experts are their own. These opinions do not represent the views of The Times of India)
