Stock Market Crash: Domestic equity benchmarks Sensex and Nifty 50 fell on Frday, July 24 in a broad-based sell-off as renewed geopolitical tensions pushed crude oil prices higher. The benchmark Nifty 50 fell 1.03% to 23,623, while the Sensex lost 1.11% to 75,543 as of 10:10 am
Nifty 50 fell as much as 1.08% to 23,611.20, while the Sensex declined as much as 1.16% to 75,504.
All sectors are in red, with Nifty Realty falling the most, down 1.82%, followed by Auto, Rural and Defence.
The broader market is facing pressure too, with the Nifty Smallcap 250 falling almost 1.46%, and the Nifty Midcap 150 dropping about 1.25%.
Here's three reasons why markets are crashing on Thursday:
Geopolitical Tensions Rising
Iran has rejected a ceasefire proposal put forward by Donald Trump and delivered to Tehran by Iraqi Prime Minister Ali al-Zaidi even as the US President threatened to escalate the war and target the country's critical infrastructure.
The New York Times reported that details of the ceasefire proposal were not immediately clear, though Iranian officials described it as the only offer on the table and said Tehran was not interested in a temporary deal that left the question of control over the Strait of Hormuz unresolved.
Al-Zaidi met Iranian President Masoud Pezeshkian, chief negotiator Mohammad Bagher Ghalibaf, and Minister of Foreign Affairs during the visit, the outlet reported.
Crude Prices On The Rise
Brent crude climbed above the $101-a-barrel mark on Thursday for the first time in two months as escalating geopolitical tensions in the Middle East heightened fears of supply disruptions, extending a sharp rally in global oil prices.
The international benchmark rose above $101 a barrel, taking its weekly gain to around 14%, while West Texas Intermediate (WTI) traded near $92 a barrel. The latest leg of the rally follows attacks by Iran-backed Houthi militants on Saudi oil tankers in the Red Sea, a key shipping route that has emerged as an alternative to the Strait of Hormuz.
The move was further supported after US President Donald Trump warned of "major military punishment" for Iran and the Houthis if further attacks on vessels occur in the Red Sea. According to Axios, Trump is also considering a "massive attack" on Iran, raising concerns that the conflict could intensify further.
Weak Global Cues
US stock futures were little changed early Friday after a sharp selloff in the previous session, as a spike in crude oil prices and disappointing earnings from two megacap companies weighed on investor sentiment. S&P 500 futures were flat, Nasdaq-100 futures slipped 0.26%, and Dow Jones futures were down around 20 points.
In the previous session, the Dow Jones Industrial Average fell more than 500 points, or about 1%, marking its fifth decline in six sessions. The S&P 500 and Nasdaq Composite posted their steepest single-day losses since June 23, falling 1.2% and 2.2%, respectively. Asian markets also traded sharply lower, with Japan's Nikkei 225 falling 2.79%, Topix down 1%, South Korea's Kospi losing more than 5%, Kosdaq declining 4.95%, Australia's S&P/ASX 200 falling 0.95%, Hong Kong's Hang Seng shedding 1.33%, and China's CSI 300 slipping 1.4%.
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