There was panic among investors as soon as trading started in the Indian stock market on Wednesday, September 2. Amidst the increasing tension between America and Iran, there was a sharp rise in the prices of crude oil, which had a direct impact on the domestic market. The Sensex fell by 760 points in early trade, while the Nifty slipped below the crucial level of 23,850. The fall in the Sensex increased during trading. 808 points reached and Nifty 23,807 Touched a low of. Investors’ concerns further increased as crude oil crossed $96 per barrel for the first time in more than a month.
Sensex-Nifty boom in early trade
At around 9:24 am, the Sensex was trading at the level of 76,183 with a fall of 760 points. At the same time, Nifty fell by 232 points to reach 23,823. As the business progressed, the selling pressure increased further. Sensex fell by 808 points, while Nifty broke the important level of 23,850 and reached a low of 23,807.
Iran-America tension increases investors’ worries
The main reason for this huge fall in the market is believed to be the increasing military tension between America and Iran. The tension between the two countries has deepened after the attack on Iranian military bases by the US Army. In response, there have been reports of Iran targeting American bases as well. Al Jazeera According to the report, Iran’s Islamic Revolutionary Guard Corps (IRGC) has claimed an attack on the American military barracks at Camp Titin in Jordan. Iran has also said that it is targeting the American forces present at Sheikh Isa Air Base in Bahrain. These developments have increased uncertainty in global markets.
Crude oil price reached near $97
The biggest impact of increasing tension in West Asia was visible on crude oil prices. Brent crude futures during trading Jumped by 5.91 percent to $ 96.99 per barrel Reached. After more than a month, the price of crude oil crossed 96 dollars, which has increased the concern for oil importing countries like India. Due to expensive oil, there is a possibility of increasing the costs of companies and increasing pressure on inflation.
Selling pressure in Asian markets also
The impact of Iran-America tension was not limited to the Indian stock market only. On Wednesday, pressure was also seen in Asian markets and decline was recorded in many major markets. Earlier, American stock markets also closed with a decline for the third consecutive trading session on Tuesday. Dow Jones declined 0.8 percent, S&P 500 declined 0.71 percent and Nasdaq declined 1 percent.
American bond yield also increased
10-year treasury yield also increased in America 4.79 percent It increased, whereas on Monday it was 4.75 percent. The rise in bond yields and geopolitical tensions further increased investors’ concerns. In such an environment, investors may move away from risky assets and turn to safer options. Its effect is visible in the form of selling in the stock markets.
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On what factors will the future direction of the market depend?
At present, the stock market’s focus is on US-Iran tension and crude oil prices. If tensions in West Asia escalate further and crude oil prices remain high, sentiment in global markets may continue to remain under pressure. US President Donald Trump has said that he is not trying to put pressure on Iran to bring it back to the negotiating table. In such a situation, the market has not received any clear signal about the tension reducing. Investors are now keeping an eye on the upcoming developments.