Stock market today (Image source: iStock)
New Delhi: Indian stock markets crashed today. In the first operations both the Sensex and Skilled 50 opened significantly lower. The reason behind the negative opening is weak global signals and rising geopolitical tensions in the Middle East. Why were Indian indices hit so hard? What are the reasons behind the fall? There are several such questions floating around in the minds of investors. Here we list five key factors that caused the market to open lower and how it resulted in a loss of nearly Rs 6 lakh crore for investors.
Stock Market today: Opening bell
After moving forward, first of all, look at today’s stock market open. He BSE Sensex fell 1,264.20 points, or 1.50 percent, to 83,002.09 at the opening bell. Similarly, the Nifty 50 opened 344.05 points, or 1.33 per cent, lower at 25,452.85. The Nifty 50 has fallen 3 per cent in the last four sessions.
Five key reasons for the current market decline
1. Iran-Israel conflict
Tensions in the Middle East rose after Iran fired 200 missiles at Israel on October 1, in response to the assassination of Hezbollah leader Hassan Nasrallah. Israel has vowed to retaliate and hinted at an even stronger response if Iran attacks again. In recent developments, Israeli forces launched attacks on Lebanon, killing six people and wounding seven others in central Beirut.
2. New SEBI rules for derivatives
The Securities and Exchange Board of India (SEBI) has introduced new rules for trading equity derivatives, making trading difficult and expensive. These changes include reducing the number of weekly options contracts and increasing the minimum trading amount, which affects market sentiment.
3. Sale of foreign investors
Foreign institutional investors (FIIs) sold shares worth Rs 5,579.35 crore on October 1. This has added pressure on the markets. However, domestic institutional investors (DIIs) bought shares worth Rs 4,609.55 crore on the same day.
4. Rising crude oil prices
Crude oil prices rose on concerns that the conflict in the Middle East could disrupt the region’s oil supply. Higher oil prices are a negative factor for India, which imports large quantities of crude oil. Brent crude futures rose 0.87 percent to $74.54 a barrel, while U.S. crude futures gained 1.03 percent to $70.82 a barrel.
5. Global market signals
Global market trends also contributed to the decline, with mixed signals from Asian markets and a weak overnight performance from US stock markets weighing on investor sentiment.
Stock market crash: investors’ loss
The total market value of all companies listed on the BSE declined by Rs 5.63 lakh crore. As a result, the market capitalization of companies listed on the BSE reduces to Rs 469.23 lakh crore. This means that nearly Rs 6 lakh crore has been wiped out of investors’ pockets.
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