Sensex, Nifty crash today: The Indian stock market benchmarks, the Sensex and the Nifty 50, suffered significant losses in morning trade on Wednesday, 2 September, mirroring weak global sentiment.
The Sensex crashed over 800 points, or 1%, to hit an intraday low of 76,136, while the Nifty 50 plunged over 250 points or more than 1%, to drop to 23,787 during the session.
The selloff was broad-based as the BSE 150 Midcap and 250 Smallcap indices also dropped more than 1% each.
Investors lost about ₹4 lakh crore within the first 30 minutes of the session as the overall market capitalisation of BSE-listed firms dropped to ₹484 lakh crore from more than ₹488 lakh crore in the previous session.
Among sectoral indices on the NSE, the auto pack crashed by more than 2% after many auto companies’ August sales numbers failed to meet expectations. The Nifty Realty index also crashed 2%, while Nifty Bank, Consumer Durables, Financial Services, and IT dropped by 1%.
Why is the stock market down today?
Let’s take a look at three key factors behind the fall in the Indian stock market:
1. US-Iran conflict intensifies
Fresh exchanges of missiles between the dealt a blow to hopes of a near-term resolution to the West Asian conflict, and raised concerns that energy prices could remain high for a longer period, driving inflation up and triggering tighter monetary policies globally.
Tehran launched missiles and drones in retaliation for a fresh wave of US strikes, escalating a conflict that had briefly eased after a month without direct military action.
According to , US Central Command said in a statement on Tuesday evening that it had concluded its latest round of attacks on Iranian military targets, including air defence installations, radar systems and maritime assets.
2. Oil prices surge
Brent are now near $96 per barrel, keeping investors nervous. Higher-for-longer oil prices can strain India’s fiscal position as the country is the world’s third-largest importer of crude oil and meets about 85-90% of its total oil requirements through imports.
“The escalation of the US-Iran conflict and the consequent 5% spurt in Brent crude overnight to $96 is a sentiment negative,” said V K Vijayakumar, Chief Investment Strategist, Geojit Investments.
Higher oil prices can undermine India’s favourable growth-inflation dynamics and hit corporate profitability by increasing input costs. India’s at 7.8% exceeded expectations despite the West Asian conflict, oil price volatility, and US tariff-related uncertainties. However, the resilience of the Indian economy will face challenges if oil prices remain elevated for a prolonged period.
3. Bond yields surge globally
Equity investors are facing another headwind of surging bond yields globally. Investors are selling bonds aggressively, driving yields higher amid concerns over inflation, mounting government debt, and expectations of monetary tightening.
The US 10-year bond yield jumped to 4.82%. Japan’s 10-year bond yield reached 3% for the first time since 1996. U.K. 10-year government bonds- Gilts- jumped to 5.23%, their highest level since June 2008.
“The big threat is the rising bond yields in the US. The macro construct in the US indicates further hardening of the bond yields. If the 10-year yield touches 5%, it could trigger a significant correction in global equity markets. Therefore, this is the macro indicator to watch closely,” said Vijayakumar.
Read all market-related news
Read more stories by
Disclaimer: This article 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.