Stock market today: The Indian stock market witnessed a strong across-segments selloff in intraday trade on Monday, 18 May, dragging the benchmarks- the Sensex and the Nifty 50 down by more than 1% each amid weak global cues.
The Sensex crashed more than 1,000 points, or over 1%, to an intraday low of 74,180, while the Nifty 50 tanked over 1% to the day’s low of 23,317. The mid and small-cap indices on the BSE dropped up to 2.5% during the session.
The sharp selloff dragged the overall market capitalisation of BSE-listed firms to below ₹452 lakh crore from nearly ₹461 lakh crore in the previous session, making investors poorer by ₹9 lakh crore in a single session.
Why is the stock market falling today?
Here are five key reasons behind the selloff in the Indian stock market:
1. Middle East tensions see fresh escalation
A targeted on the United Arab Emirates’ (UAE) Barakah nuclear power plant on Sunday added fuel to the simmering tensions in the Middle East, hitting market sentiment globally.
The ceasefire between the US and Iran is already hanging in uncertainty, with both sides yet to settle their conflict despite diplomatic efforts.
US President has issued a fresh warning to Iran to act quickly or be ready to face consequences.
“For Iran, the clock is ticking, and they better get moving, FAST, or there won’t be anything left of them. TIME IS OF THE ESSENCE,” Trump wrote on Truth Social.
2. Crude oil price jumps
Brent Crude, the international crude oil benchmark, jumped 2% to reclaim the $111 per barrel, stoking inflationary fears. jumped due to heightened fears of fresh hostilities in the Middle East after a drone attack near a nuclear power plant in the UAE.
“Brent crude has spiked to $111 on absence of initiatives to open the Strait of Hormuz. Elevated crude may force another round of price hikes in petrol and diesel, which will have negative implications for inflation,” VK Vijayakumar, Chief Investment Strategist, Geojit Investments, noted.
Higher oil prices are a major negative for the Indian economy as they widen the country’s trade deficit, weaken the rupee, drive inflation higher, strain government finances, and erode corporate profitability.
3. Rupee plumbs fresh all-time low
The fell to a fresh record low of 96.23 per dollar in intraday trade on 18 May amid higher crude oil prices and soaring global bond yields.
The has declined nearly 7% against the US dollar so far this year.
“The Indian rupee weakened as the benchmark 10-year US treasury yield climbed to 4.6250%, while Brent crude rose nearly 2% to $111 per barrel amid stalled US–Iran talks. The rupee may remain under pressure, with the RBI focused on curbing volatility rather than defending a specific exchange-rate level,” Jigar Trivedi, Senior Research Analyst at IndusInd Securities, noted.
Some experts fear that the domestic unit may fall to the 100-per-dollar mark by the end of the year, further aggravating foreign capital outflows and keeping market sentiment down.
4. Rising US bond yields
Rising US bond yields have been a major headwind for emerging markets like India.
The benchmark US 1-year bond yield is 4.62%, accelerating the flight of foreign investors from the Indian stock market.
“The spike in the US 10-year bond yield to 4.62% is another negative factor for emerging markets. Rupee may further depreciate, aggravating the vicious cycle of rupee depreciation and FPI selling,” Vijayakumar said.
5. Technical factor
The Nifty 50 breached a crucial support of 23,400 on the downside. Experts see the index potentially reaching 23,200 or even below.
“A fresh sell-off is possible if the index breaks below 23,600. Below this level, it could retest 23,400. Further decline may also continue, potentially dragging the index down to 23,200–23,000-22850,” said Shrikant Chouhan, the head of equity research at Kotak Securities.
Vipin Kumar, AVP- Equity Research and PMS at Globe Capital Market, believes that a sustained trading below 23,580 could drag the Nifty 50 to the 23,200–23,150 zone. Conversely, a decisive breach above 23,800 could lead the index toward 24,000–24,150 in the near term.
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Disclaimer: This story is for educational purposes only and does not constitute investment advice. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.