Stock Market Crash: The Indian stock markets saw a huge decline on 13 June today. The Nifty started down by 415 points to below 24,500, while the Sensex declined by more than 1,200 points in early trade. Increasing geopolitical stress in the Middle East and a rapid rise in crude oil prices have increased the concern of investors. Due to this, all -round selling was seen in the stock market. The Nifty Smallcap index broke 400 points. Weak global signs, Israel’s attacks on Iran and the rise in crude oil prices have raised the concern of investors.
There was such an atmosphere of selling in the market that in a few minutes the total market of companies listed in BSE declined by Rs 7 lakh crore. This is the second consecutive day when the stock market has seen a sharp decline.
However, by 10:15 am, the market compensated for some damage. By that time, the Sensex was trading at 80,898.14, down 793.84 points or 0.97%, while the Nifty was at 242.45 points or 0.97% to 24,645.75. In early trade, shares of Kotak Mahindra Bank, Power Grid, Adani Ports, Tata Motors, UltraTech Cement and Asian Paints saw the biggest decline.
Market experts said that there were 5 major reasons behind today’s decline in the stock market-
1. Israel’s attack on Iran
The biggest reason behind today’s decline in the stock market was Israel’s attack on IranIsrael carried out major air strikes in Iran’s capital Tehran in the early hours of Friday. The targets that were targeted were associated with Iran’s nuclear facilities. The attack occurred after a report by the UN Nuclear Watchdog, which claimed Iran is violating the Nuclear Non -Proliferation Treaty (NPT) and is not giving complete information about its nuclear programs. After this attack, Iran’s Supreme Leader Ayatollah Ali Khamenei has warned of ‘tightly retaliated’. Bhurajnical tension has increased in the Sasa Middle East, due to which investors have seen nervousness today.
2. Fast in the price of crude oil
The direct impact of Iran-Israel stress showed the prices of crude oil. In the internal market Crude oil price jumped up to 13%Which is bad news for crude buyer countries like India. The price of Brent crude climbed 10.28% to $ 76.48 per barrel. At the same time, the price of American WTI crude rose 11.38% to $ 75.82 per barrel. The increase in crude prices led to a sharp decline in shares of oil marketing companies like Indian Oil, Hindustan Petroleum and Bharat Petrol.
Investors fears that crude supply may be disrupted due to increased tension in the middle East. India imports more than 85% of its oil requirements. In such a situation, this increase will increase trade deficit and pressure on the rupee will also increase. Also, inflation rate can also increase.
3. Selling of foreign investors
Foreign institutional investors (FIIs) have been selling in the stock market for the last 2 consecutive days. On Thursday 12 June, he sold a net selling of Rs 3,831.42 crore. Earlier on Wednesday, he also withdrawn Rs 446.31 crore from the stock market. This has increased the pressure on the market.
4. Weak signs from global markets
There was a huge selling atmosphere in Asian markets too today. Taiwan’s market was trading 0.50 per cent, Hong Kong’s Hangseng index 0.85 per cent, South Korea’s Kospi Index 1.22 per cent and China’s Shanghai Composite Index declined by 0.59 per cent. The gift Nifty is two hundred points slipped. Investors are currently staggering due to the upheaval turmoil at the global level. America’s Dow Futures also broke more than 600 points before the Indian stock market opened.
5. Weakness in Indian rupee
On Friday, there was a drastic decline in the Indian rupee against the dollar. The Indian rupee fell 66 paise to 86.18 per dollar. While the rupee closed at 85.60 on Thursday. The strong demand for the dollar, the expensive crude and the decline in the market, all three together weakened the rupee. This has also affected the sentiment of investors.
What do experts say?
VK Vijaykumar, Chief Investment Strategist of Geojit Investments Limited, said, “If Israel’s attack and Iran’s counter attack continues for a long time, it may have serious economic results. Brent crude prices have increased by about 12% to $ 78. The impact on the stock market will depend on how long it will continue. Is.”
Also read- Israel Strikes Iran: Israel attacked Iran, 10% jump in crude oil prices
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