Indian stock market benchmarks, the Sensex and the Nifty 50, suffered strong losses in intraday trade on Wednesday, 22 April, after rising for the last three consecutive sessions.
The Sensex crashed more than 800 points, or 1%, to an intraday low of 78,442, while the NSE barometer Nifty 50 plunged over 200 points, or nearly 1%, to the day’s low of 24,353.
However, the mid and small-cap segments exhibited resilience. The Nifty Midcap 100 and Smallcap 100 indices rose by up to half a per cent during the session.
Why is Sensex, Nifty 50 falling today?
Let’s take a look at some key factors behind the fall in the Indian stock market benchmarks:
1. Profit booking in bank, IT heavyweights
The equity benchmarks decline due to profit booking in banks and IT heavyweights amid the ongoing Q4 earnings season. Nifty Bank declined by more than half a per cent during the session, after clocking a gain of 2.3% over the last three sessions.
On the other hand, the Nifty IT index crashed almost 4% during the session after weak Q4 earnings and cautious management commentaries of some IT companies.
Meanwhile, over the last three consecutive sessions, the 30-share pack Sensex had risen by 1,285 points, or 1.6%, and the Nifty 50 had jumped 380 points, or 1.6%.
2. Persisting concerns over the US-Iran war
While US President Donald Trump announced the extension of the ceasefire with Iran to allow for further peace talks, there is no clarity on when the talks between the two countries will resume and how they plan to resolve the key bones of contention.
A White House official confirmed that Vice President JD Vance would not travel to Pakistan for talks on Tuesday as previously planned, pending the submission of an Iranian proposal.
The market is cautiously awaiting fresh updates from West Asia, as a prolonged conflict in the region could derail global growth momentum and raise inflationary pressures.
3. Weak global cues
Major Asian markets, including Japan’s Nikkei and Korea’s Kospi, traded with thin gains following a fall in Wall Street indices after Iran rejected the second round of peace talks.
Sentiment across markets remains fragile due to conflicting signals about the US-Iran war. A firming US dollar and rising US treasury yields are also exerting pressure on emerging markets like India.
4. Crude oil prices decline but stay above the $95 mark
Brent Crude prices fell but stayed above the $95 per barrel, keeping investors worried about their impact on the Indian economy and stock market.
A prolonged period of higher crude oil prices can increase input costs for Indian companies, impacting their profitability.
According to Vinod Nair, Head of Research, Geojit Investments, there could be a 2% to 4% earnings cut due to the crude oil price rise. If a peace deal is reached, the downside risk will come down.
5. Technical factor
According to Shrikant Chouhan, Head Equity Research, Kotak Securities, the short-term market structure is bullish, but due to temporary overbought conditions, some profit booking may occur at higher levels.
“For day traders, 24,500 will act as immediate support zones. Above these levels, the market could continue its positive move towards 25,750–25,800. Conversely, below 24,500, we could see a sharp intraday correction. Below these levels, the market could retest the 24,350–24,300. A close below the level of 24300 could be negative for the market,” said Chouhan.
Read all market-related news here
Read more stories by Nishant Kumar
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
