Sensex, Nifty 50 crash: The Indian stock market suffered a strong across-the-board sell-off in intraday trading on Monday, 19 October, with the benchmark indices, the Sensex and the Nifty 50, dropping more than 1% each amid weak global cues.
The Sensex declined over 1,000 points, or 1.4%, to an intraday low of 73,709, while the Nifty 50 dropped over 300 points, or 1.3%, to the day’s low of 22,845. The BSE 150 Midcap index declined by 0.80%, while the BSE 250 Smallcap index dropped 1%.
Investors lost ₹4 lakh crore in a single session as the overall market capitalisation of BSE-listed firms dropped to ₹469 lakh crore from ₹472.6 lakh crore in the previous session.
Why is the stock market down today?
Experts highlight the following three factors behind the fall in the Indian stock market:
1. Elevated oil prices
Brent crude prices are near $108 per barrel despite some correction in Monday’s sessions, weighing on market sentiment.
Crude oil prices have been up for most of the year now, driving inflation higher, triggering monetary tightening by major global central banks, including the US Federal Reserve, Bank of Japan, and the Reserve Bank of India, and raising concerns over the impact of higher inflation and elevated interest rates on overall economic growth and corporate profitability.
“The escalation of tensions in Hormuz and the consequent surge in Brent crude is a strong headwind to the market. Even though the attractive valuations of the large-caps and the appreciation of the rupee have turned the stance of FIIs towards India a bit positive, it is unlikely to sustain, given the high crude price,” V K Vijayakumar, Chief Investment Strategist, Geojit Investments, noted.
2. Selloff in large private banking stocks
Sharp decline in large private banking stocks after their Q2 results soured market sentiment. Stocks such as Axis Bank, HDFC Bank and YES Bank declined by up to 5%, driving their sectoral index, Nifty Private Bank, down 2% and the Nifty Bank index lower by 1%.
“Expectations were high, and the results were mixed, particularly on certain fronts. That is what is weighing on sentiment. However, if you look at the broader trend, especially in PSU banks, it appears strong. Some private banks, including Kotak Mahindra Bank, ICICI Bank and others, are also holding up,” said Ajit Mishra, SVP – Research, Religare Broking.
(This is a developing story. Please check back for fresh updates.)
