Business Desk- Share Market Crash: The impact of increasing tension between America and Iran, rise in crude oil prices and increase in American bond yields is clearly visible on the Indian stock market. Sensex fell by more than 700 points in early trade on Tuesday, while Nifty fell below 22,600.
Amidst all-round selling in the market, the market cap of companies listed on BSE declined by about Rs 5 lakh crore in early trade. That means the wealth of investors decreased by about Rs 5 lakh crore.
Sensex down 616 points, Nifty also red
At 9:36 am, the Sensex was trading at 72,155.58, down 616.14 points or 0.85%. At the same time, there was a decline of 184.80 points or 0.81% in Nifty 50 and it was at the level of 22,595.45.
In intra-day trading, the Sensex fell by 707.72 points to reach 72,064.00. Nifty also fell by 210.60 points to the level of 22,569.65.
There is selling pressure in the broker market also. Both Nifty Midcap 100 and Nifty Smallcap 100 are trading in the red.
Concern increased due to rise in crude oil
Crude oil prices have increased due to increasing tension between America and Iran. Global oil benchmark Brent crude currently remains near $100 per barrel.
The rise in crude oil prices raises concerns for the Indian market, as it may increase inflation and pressure on companies’ costs. For this reason, caution has increased among investors.
US bond yield crosses 5%
America’s 10-year bond yield has also jumped and remains above 5%. The effect of increase in bond yields is visible in the form of pressure on the equity market. In a high yield environment, investors’ inclination towards riskier assets is influenced.
FIIs selling for the third consecutive day
Continuous selling by foreign investors has also increased pressure on the market. On September 28, foreign investors made net sales in the Indian stock market for the third consecutive trading day.
On Monday, FIIs made a net sale of Rs 5,353.22 crore. Earlier on September 25, he had made a net sale of shares worth Rs 3,693.93 crore and on September 24, he had made a net sale of shares worth Rs 5,027.36 crore.
Most sectors except pharma are red
In early trade, except Pharma, almost all sectoral Nifty indices are in the red. However, at present no sector is seeing a decline of more than 1%. There is selling pressure in banking shares also.
Today expiry is also important for the market
There is also monthly expiry of derivative contracts in the market today. Derivative contracts of other indices of NSE including Nifty and Bank Nifty have expiry in the month of September. Along with this, F&O contracts of stocks on NSE also have monthly expiry.
The expiry means that traders will have to liquidate or rollover their derivative positions for the month of September today. In such a situation, the volatility may increase due to expiry in the market which is already under pressure.