Why is the Indian stock market now down? Presented with five explanations

Stock market today: The Indian stock market continued its selling trend on Monday for the second consecutive session as a result of the Israel-Iran war’s mounting tension in the Middle East, rising US dollar rates and the US Treasury yield, FIIs’ selling, etc. The Nifty 50 index fell more than 1 percent in the first few minutes after the opening bell, starting the day at 22,339 and reaching an intraday low of 22,264. During the early morning session, the BSE Sensex dropped more than 800 points and reached an intraday low of 73,727 points.

Why is today’s share market down?
Avinash Gorakshkar, Head of Research at Profitmart Securities, explained why the Indian stock market was down today: “The main cause of the decline in the Indian markets is the escalating tension in the Middle East as a result of the Israel-Iran war.” But there are other factors that have contributed to the selling pressure in the Indian stock market, such as the strengthening US currency and Treasury rates, selling by FIIs, a declining value of the Indian National Rupee (INR), and increasing crude oil prices.”

Experts identified the following five main causes for the decline in the Indian stock market:

[1] Iran-Israel war: According to Avinash Gorakshkar, “the main reason for selling in the Indian equity market is tension in the Middle East, as this has put doubts regarding the geo-political uncertainty in the region.”

2] Weal global market: “Selling has occurred on all international bourses after an escalation in the Middle East. On Friday, the US stock market saw a decline. Major Asian markets, including the Nikkei, Hang Seng, Kospi, and others, are trading under pressure during Monday’s early morning session, according to Sandeep Pandey, the founder of Basav Capital.

3] Increase in US dollar rates: “The US dollar is steadily increasing; the US dollar index is almost at 106 points, and the US dollar rate versus the Japanese yen has reached a 34-year high.” According to Profitmart Securities’ Avinash Gorakshkar, “this has spurred US Treasury yields, which has spurred selling in the global equity market, which includes the Indian stock market.”

4] Soaring prices for crude oil: “In both domestic and foreign markets, the price of crude oil has risen to a six-month high.” The price of gasoline increased by 6% in March 2024, but it has since increased by more than 3%, according to Anuj Gupta, Head of Commodities & Currency at HDFC Securities.

Sandeep Pandey of Basav Capital said, “Soaring crude oil prices are not a good sign for the global economy as it is expected to put pressure on the local currency and inflation.”