Stock market indices Sensex and Nifty saw a bloodbath on Wednesday, with a wipeout of nearly 2 per cent from the securities market.
The tumble came after US President Donald Trump announced that the interim agreement with Iran is over, which eventually led to a sharp rally in crude oil prices. The 30-share BSE Sensex tanked 1,677.12 points, or 2.15 per cent, to settle at 76,503.60. During the day, it went as low as 1,921.69 points, or 2.45 per cent, to 76,259.03. The 50-share NSE Nifty tumbled 516.65 points, or 2.12 per cent, to end at 23,882.05.
InterGlobe Aviation, Maruti, Hindustan Unilever, Bajaj Finance, Kotak Mahindra Bank and Mahindra & Mahindra were major laggards.
What are the reasons behind the stock market crash
Middle East war escalation: Stock market indices faced immense pressure due to the announcement made by President Trump over the US-Iran war, stating that the MoU signed with the country to end the conflict was 'over'. This negatively affected markets and caused a slump in the equities market.
"Indian equity markets witnessed a sharp sell-off as US President Donald Trump declared the interim peace deal with Iran is 'over' following Iranian attacks on commercial vessels in the Strait of Hormuz, reigniting geopolitical tensions and raising fresh concerns over global energy supplies," Ponmudi R, CEO of Enrich Money, an online trading and wealth tech firm, told PTI.
Rise in crude oil prices: Trump's statement led to a sharp rally in crude oil prices. Brent crude, the global oil benchmark, jumped 6.18 per cent to USD 78.74 per barrel, sending shockwaves across global financial markets.
Surge in India VIX: The country's volatility index, India VIX, increased by nearly 30 per cent to 15.08 as per Moneycontrol, hinting at increased uncertainty and heightened fear among investors.
Weak global markets: South Korea's Kospi fell by 5.35 per cent, Japan's Nikkei 225 index declined 2.11 per cent, and Shanghai's SSE Composite index tumbled by 0.49 per cent, while Hong Kong's Hang Seng index jumped 2.99 per cent. These underlying factors also had an impact on the Indian stock market indices.
Fall in rupee: Disappointing investors, the rupee tanked 59 paise to settle at 95.55 (provisional) against the US dollar. At the interbank foreign exchange market, the rupee opened at 95.15 against the US dollar and traded in the range of 94.98-95.61 during the day. It eventually settled at 95.55 (provisional), down 59 paise from its previous close, reported PTI.
