Rupee crash & Oil surge: 5 reasons why the ‘Bengal Win’ euphoria fizzled out for Indian markets – Market News

The Sensex has swung around 600 points intraday and is now trading near 76,950 levels. The Nifty too has come under pressure, falling nearly 200 points intraday and hovering around 24,000. 

Let’s take a look at the key reasons why the market fell today – 

Crude oil surge 

One of the key factors to watch for and a main reason for today’s fall is the sharp rise in crude oil prices. 

Brent crude has moved higher, hovering around the $114 mark. 

Now, for an oil-importing country like India, this surge in the crude prices increase costs across industries.

Rupee hits record low, raises concerns

Adding to the pressure, another factor that dragged the markets lower is the weakness in the Indian currency. 

The Indian rupee has slipped to a record low of around 95.40 against the US dollar.

A falling rupee makes imports more expensive, especially commodities like crude oil. 

Global uncertainty returns to centre stage

The domestic factors like elections had briefly lifted sentiment but global concerns are a key factor to watch.

For instance, the ongoing tension in West Asia, especially around key trade routes like the Strait of Hormuz, are creating uncertainty.

Apart from this, the rising US bond yields are also making global markets more volatile. This is indirectly affecting Indian equities.

Banking and heavyweight stocks drag indices

Apart from this, another reason behind the fall in the market is also being driven by heavyweights, particularly in the banking and financial space. 

The Nifty Bank index has dropped nearly 1%, losing over 400 points and trading around 54,400.

In the intraday trading session, stocks like HDFC Bank, ICICI Bank, and other large financial names are trading lower, pulling the indices down. 

Along with banks, other key stocks such as Asian Paints, Larsen & Toubro, Tech Mahindra, and Eternal are also in the red.

Broad-based selling across sectors

Most sectors are trading in negative territory.

Financials, IT, pharma, metals, and realty stocks are all under pressure. 

Bunking the trend, sectors such as media and FMCG are trading in the green. 

What analysts are saying?

Market experts believe that the initial boost from election results may not last long, especially with global risks rising again.

Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said, “The sentimental boost provided by the BJP’s electoral victory in W Bengal will not last. The market trend will be guided by the developments in West Asia particularly in the Strait of Hormuz. The resumption of hostilities in the Hormuz region and Brent crude again spiking to around $113 are headwinds for the market. Also the US-10-year bond yield rising to 4.44% and rupee sliding to 95.23 level are unfavourable from the FPI flows perspective. Yesterday’s cash market buy by the FIIs is unlikely to be the beginning of a trend. In the near-term the market will respond to Q4 results and management commentary.”