Sensex falls 700 points: 3 reasons why stock market is falling today

Markets opened sharply lower on Monday as rising Middle East tensions, higher crude prices and global weakness hit sentiment. The slide sharpened concerns over inflation, foreign outflows and pressure on technology stocks.

In Short

• Middle East conflict raises crude oil prices, fueling market fears
• Global selloff hits investor confidence, US jobs data concerns rate hikes
• Foreign investors continue heavy selling, domestic buyers remain active

Stock markets opened sharply lower on Monday, with the Sensex falling more than 600 points and the Nifty slipping below 23,200, as investors reacted to rising tensions in the Middle East, a jump in crude oil prices and weakness across global markets.

At around 9:30 am, the BSE Sensex was down 627.47 points, or 0.85%, at 73,615.87, while the NSE Nifty50 fell 195.40 points, or 0.84%, to 23,171.30.

The selloff was broad-based. Most sectoral indices traded in the red, with Nifty IT falling 1.61%, Nifty Realty declining 1.68%, Nifty Auto dropping 1.21% and Nifty Metal slipping 1.31%. Broader markets were also under pressure, with the Nifty Midcap 100 falling 0.73% and the Nifty Smallcap 100 declining 0.63%.

Among Sensex stocks, only Sun Pharmaceutical Industries, Axis Bank, Power Grid Corporation of India and State Bank of India were trading in the green. The biggest losers included Mahindra & Mahindra, Tata Consultancy Services, Trent, InterGlobe Aviation, Bajaj Finance, Tata Steel, Eternal, HCL Technologies and Infosys.

IRAN-ISRAEL CONFLICT PUSHES CRUDE OIL PRICES HIGHER

The biggest trigger for today's fall is the fresh escalation in the Middle East conflict.

Iran launched missiles at Israel following Israeli strikes on Beirut, sharply reducing hopes of a near-term peace agreement. The renewed hostilities have increased concerns about disruptions to global oil supplies and have pushed crude oil prices higher.

Brent crude rose 3.56% to $96.40 per barrel, while WTI crude climbed 3.32% to $93.55 per barrel.

For India, which imports most of its crude oil requirements, higher oil prices are a major concern. Rising crude increases fuel costs, puts pressure on inflation, widens the current account deficit and can hurt economic growth. These concerns typically weigh on stock market sentiment.

GLOBAL MARKET SELLOFF HITS INVESTOR CONFIDENCE

Another reason behind today's weakness is the sharp selloff in global markets.

According to Bajaj Broking's Morning Bell report, Wall Street witnessed an intense and broad-based selloff on Friday after stronger-than-expected US jobs data raised concerns that the US Federal Reserve may keep interest rates elevated for longer. The report noted that Asian markets were also trading deep in the red, with Japan's Nikkei plunging nearly 3.7% in early trade.

A stronger US economy usually supports higher interest rates. That reduces the chances of quick rate cuts and makes investors less willing to take risks in emerging markets such as India.

Dr VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said the sharp 4.18% fall in the Nasdaq on Friday rattled global markets, particularly technology-heavy markets such as South Korea and Taiwan.

IT STOCKS TUMBLE AFTER RECENT RALLY

Information technology stocks, which had been supporting the market in recent sessions, turned into major losers on Monday.

The Nifty IT index fell 1.61% in early trade. Heavyweights such as TCS declined 1.97%, Infosys dropped 1.32%, HCL Technologies fell 1.36%, Tech Mahindra slipped 0.99% and LTIMindtree was under pressure.

The weakness follows a sharp rally in IT shares over the past few sessions. Investors appear to be booking profits after the recent gains.

Global technology stocks also came under pressure after Friday's Nasdaq selloff, adding to concerns around the sector.

FOREIGN INVESTOR SELLING REMAINS A CONCERN

Foreign investor selling continues to be another major headwind for Indian equities.

According to Bajaj Broking data, foreign institutional investors (FIIs) sold shares worth Rs 8,776 crore in the previous session, while domestic institutional investors (DIIs) remained buyers. The report also highlighted that FIIs have pulled out more than Rs 3.27 lakh crore from Indian equities so far this year.

Persistent foreign outflows have been one of the key reasons behind market volatility in recent months.

WHAT TO EXPECT?

Dr VK Vijayakumar said there are strong headwinds for the market at the start of the week. According to him, higher crude oil prices, uncertainty in the Middle East, global technology weakness and expectations that the US Federal Reserve may keep interest rates unchanged for longer are weighing on investor sentiment.

However, he added that India's strong FY26 GDP growth of 7.7%, better-than-expected March quarter earnings and continued domestic investor participation could provide support to the market if the selling intensifies.

The Sensex was down 627 points at 73,615.87, while the Nifty fell 195 points to 23,171.30.

Among sectoral indices, Nifty IT fell 1.61%, Nifty Realty lost 1.68%, Nifty Auto declined 1.21% and Nifty Metal slipped 1.31%.

Sun Pharma, Axis Bank, Power Grid and SBI were among the few gainers, while M&M, TCS, Trent, IndiGo, Bajaj Finance, Tata Steel, Eternal, HCLTech and Infosys led the losses.

(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)

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