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Stock market crash: Following the escalation in US-Iran tensions, key Indian stock market indices extended their morning losses. US bond yields and crude oil prices bounced back strongly from today's lows after the fresh escalation in Middle East tensions, following US President Donald Trump's hint at a fresh strike in Iran.
In this sharp sell-off, the market capitalisation of the BSE-listed stocks slumped to ₹4,62,52,492.42 crore, losing around ₹9.5 lakh crore in an hour.
The Nifty 50 index has tumbled around 300 points, while the BSE Sensex has lost over 850 points. The Bank Nifty index is also trading in red, losing more than 350 points. In this fresh crash, the Nifty 50 index has decisively crashed below the 22,500 support, while the BSE Sensex has come below the 71,800 support.
The US 10-year bond yield has bounced back from today's lower levels, gaining over 0.75%. The US 30-year bond yield has also gained more than 0.70% during Thursday's trading.
44 out of 50 Nifty stocks are trading red. Shares of Bajaj Auto, Maruti Suzuki, Shriram Finance, Adani Ports, M&M, Tata Steel, Adani Enterprises, etc., are among the biggest losers in the Nifty 50.
27 of the 30 Sensex stocks are trading in the red. Tata Steel, Ultratech Cement, Tata Motors PV, Eternal, Powergrid, etc., are among the biggest losers in the Sensex.
According to experts, the Indian stock market is falling for three main reasons: escalation in US-Iran tensions, a rebound in US bond yields, and skyrocketing crude oil prices.
Speaking on the reason for the Indian stock market crash today, Avinash Gorakshkar, Founder of Avinash Mentor Research, said, “The Indian stock market is falling today due to the fresh escalation in the US-Iran war. The US President Donald Trump has hinted at fresh strikes in Iran. This has triggered a fresh rally in crude oil prices. The US bond yields have also bounced back from today's lows.”
According to Al Jazeera, Donald Trump has hinted at a fresh strike in Iran. While talking to local reporters, the US President said that US can either deal with Iran or completely blow them out.
“The escalation in the US-Iran war is negative for the global markets, including Dalal Street, as it would further worsen the crude oil supply in the near-term. It has triggered an uncertainty in the geopolitical arrangement,” said Avinash Goakshkar.
The US Treasury yields have rebounded from today's lows. The US 10-year bond yield has shot up 0.65% to 5.674. The US 30-year bond yield too lost over 0.60% and climbed to 5.674.
“The bounce back in the US Treasury yields is more dangerous, as it would trigger a shift of foreign money from equities to the bond market. As FIIs are already bearish on the Indian equities, soaring US bond yields are something that the market is unable to digest after the escalation in the US-Iran war,” said Anuj Gupta, a SEBI-registered market expert.
The SEBI-registered expert said that the escalation in the US-Iran war has triggered fresh buying in crude oil, leading to a sharp rise in the commodity's price. This is also negative for the markets, as it would hit companies' margins and profits due to inflation.
Disclaimer: This story is for educational and informational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified financial experts before making any investment decisions.
Asit Manohar has nearly two decades of experience in the mainstream media. In this period, he has served esteemed media organisations like NDTV Profit, The Economic Times, and Zee Business. He has been working at LiveMint Digital since April 2021. During these two decades of journey in mainstream media, Asit has mainly covered external affairs, markets and personal finance. However, his earliest beats include railways, SME, MSME, and politics (Congress beat). Some of his features on political, economic, and foreign policy are documented in the parliamentary records. <br><br> While pursuing his MA (Mass Communication, Session 2004-06), Asit began his media career as a stringer at All India Radio in Varanasi. At AIR Varanasi, Asit worked with the Gyanvani, Yuvvani and Vividh Bharti teams. After working for nearly one year at AIR Varanasi, he shifted to print journalism and started working as a stringer for the HT Media Ltd, Varanasi. At HT Media Ltd in Varanasi, he covered the BHU beat. <br><br> Asit has also worked with some brokerage houses. He has worked with Religare Broking and India Infoline, where he assisted the research team in developing and executing trade strategies for intraday cash, F&O, and commodities. <br><br> Asit is a Gold Medalist in MA (Mass Communication) from BHU, Varanasi. He did his BSc. (Hons) in Mathematics from Magadh University, Bodh Gaya. Asit was a National Talent Scholarship holder during his senior secondary studies (1988-91).
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