Why Is The Stock Market Falling Today?

The benchmark indices Sensex and Nifty fell by more than 1.5%. This is because of the weakening of the global market and the increase in crude oil prices. In addition, the Indian Rupee also fell. This caused the Nifty to slip below the 23,000-mark.

Invest in Indian Markets and Unlock Future Potential With 5paisa!

Open Account Now

At 11:25 AM, the Sensex was down by 1,224.07 or 1.63% at 74,049.38, while the Nifty was down by 360.80 or 1.55% at 22,945.65. Market breadth remained weak, with 764 stocks advancing, 3,060 declining, and 112 remaining unchanged.

Profit Booking After Recent Rally

The decline follows a sharp rally of around 3.5% in the previous two sessions. On March 27, 15 of the 16 major sectoral indices traded in the red, while mid-cap and small-cap indices declined about 1.5% each.

Global Cues And Geopolitical Developments

Global equities declined as uncertainty around the U.S.-Iran conflict persisted. According to Reuters, U.S. equities fell nearly 2% on March 26, while the 10-year U.S. Treasury yield rose above 4.4%.

Asian markets also weakened, with the regional benchmark index falling 0.8%. South Korea’s equity market declined 2.7%, while Taiwan’s market dropped 1.4%, reflecting broad-based risk aversion.

The U.S. administration extended a pause on strikes against Iran’s energy infrastructure, but conflicting signals from both sides kept markets cautious.

Crude Oil Prices Remain Elevated

Brent crude prices remained above $100 per barrel, trading around $106 per barrel on March 27, according to Reuters. On March 26, Brent had risen by 5.7%, while the WTI had risen by 4.6%. Rising crude oil prices tend to drive up inflation in oil-importing nations like India.

Rupee Hits Record Low

The Indian rupee has fallen to a record low of 94.44 against the U.S. dollar. This is the lowest level the rupee has fallen in history, beating the previous low of 93.98 reported this week. The currency has declined about 4% since the start of the conflict, according to market data.

Foreign portfolio investors remained net sellers in recent sessions, contributing to currency pressure.

Volatility Increases

Market volatility has increased, and this is reflected by a rise of 7.5% in the India VIX, which now stands at 26.53.

The overall trend seen in global markets, oil prices, currency, and geopolitical events is having a bearing on Indian equities, and a general sell-off has been seen in all sectors.