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Stock market crash today: BSE Sensex and Nifty50, the Indian equity benchmark indices, tanked in trade on Thursday, dipping over 2%. While BSE Sensex gave up the 83,000 level, Nifty50 went below 25,300. BSE Sensex ended the day at 82,497.10, down 1,769 points or 2.15%. Nifty50 closed the day at 25,250.10, down 547 points or 2.12%.
Sensex and Nifty50 mirrored losses in other Asian markets as investors reduced their risk appetite amidst the escalating conflict in the Middle East.The Sensex plummeted over 1,700 points, while the Nifty50 fell below the 25,300 level.
The market capitalisation of all listed companies on the BSE decreased by Rs 9.92 lakh crore, reaching Rs 464.94 lakh crore, according to an ET report.
Worries about a potential escalation in the Middle East intensified after Iran launched ballistic missiles at Israel earlier in the week. This development stoked fears that oil supplies from the region could be disrupted if the conflict worsens. As a result, oil prices edged higher on the day, which is a negative development for oil-importing countries like India, as crude oil constitutes a significant portion of the country’s import bill.
Why BSE Sensex and Nifty50 have crashed today
Several key factors contributed to the market meltdown:
1) Iran-Israel conflict: The escalating hostilities between Iran and Israel, with reports of Israeli military casualties during ground operations in southern Lebanon and Iranian missile attacks targeting Tel Aviv, have raised concerns among investors.
2) Crude prices: The rise in crude oil prices, with Brent crude briefly surpassing $75 per barrel and West Texas Intermediate topping $72, has negative implications for oil importers like India. Analysts warn that if Israel attacks Iranian oil installations, it could trigger a huge spike in crude prices, further damaging oil-importing countries.
3) New Sebi rules: The market regulator Sebi’s decision to tighten rules in the futures and options (F&O) segment has also contributed to the decline in equity markets. The new measures, which include limiting weekly expiries to one per exchange and increasing contract sizes, may dampen retail sentiment and reduce trading volumes, adding to investor concerns.
4) China factor: Investors in India are increasingly worried about the resurgence of Chinese stocks, which have underperformed in recent years. Following the announcement of economic stimulus measures by the Chinese government last week, analysts predict sustained growth in Chinese stocks, prompting a potential outflow of funds from India. The SSE Composite index has gained over 15% in the past week, and foreign institutional investors have withdrawn Rs 15,370 crore from Indian equities in the last two trading sessions.
