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New Delhi: Indian stock markets were hit hard today, with the Sensex plummeting by 1,800 points and the Nifty50 falling below the 25,250 mark. Both indices opened significantly lower in early trade due to weak global cues and rising geopolitical tensions in the Middle East. Investors are left with several questions: Why were the Indian indices hit so hard? What are the reasons behind this downturn? Here, we outline five key factors that triggered the market’s decline, resulting in a nearly Rs 11 lakh crore loss for investors.
Stock Market Today: Opening Bell
Before moving ahead, first, look at the stock market today’s opening. The BSE Sensex dropped by 1,264.20 points, or 1.50 per cent, to 83,002.09 at the opening bell. Similarly, the Nifty 50 opened 344.05 points, or 1.33 per cent, lower at 25,452.85. The Nifty 50 has now fallen by 3 per cent over the last four sessions.
5 Key Reasons For Today’s Market Crash
1. Iran-Israel Conflict
Tensions in the Middle East escalated after Iran fired 200 missiles at Israel on October 1, in response to the killing of Hezbollah leader Hassan Nasrallah. Israel has vowed to retaliate and hinted at an even stronger response if Iran attacks again. In recent developments, Israeli forces launched attacks on Lebanon, killing six people and injuring seven others in central Beirut.
2. New SEBI Rules For Derivatives
The Securities and Exchange Board of India (SEBI) introduced new rules for trading in equity derivatives, making it harder and more expensive to trade. These changes include reducing the number of weekly options contracts and increasing the minimum trading amount, impacting market sentiment.
3. Foreign Investor Selling
Foreign institutional investors (FIIs) sold equities worth Rs 5,579.35 crore on October 1. This has added pressure on the markets. However, domestic institutional investors (DIIs) bought equities worth Rs 4,609.55 crore on the same day.
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4. Rising Crude Oil Prices
Crude oil prices increased due to concerns that the conflict in the Middle East could disrupt oil supplies from the region. Higher oil prices are a negative factor for India, which imports large quantities of crude oil. Brent crude futures rose by 0.87 per cent to $74.54 per barrel, while U.S. crude futures gained 1.03 per cent to $70.82 per barrel.
5. Global Market Cues
Global market trends also contributed to the fall, with mixed signals from Asian markets and a weak overnight performance by U.S. stock markets affecting investor confidence.
Stock Market Crash: Investors' Loss
The total market value of all companies listed on the BSE dropped by Rs 5.63 lakh crore. As a result, BSE-listed companies’ market capitalization comes down to Rs Rs 469.23 lakh crore. It means, nearly Rs 6 lakh crore rupees have been wiped out from investors’ pockets.
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