Domestic equity benchmarks Sensex and Nfty 50 opened lower on Monday, Sept. 28, with investors remaining cautious after the benchmark indexes' longest weekly losing streak since 2020 as oil prices rose following a stalemate in US-Iran peace talks. US President Donald Trump said he had rejected an Iranian proposal to reopen the Strait of Hormuz and end fighting, while Iran insisted on Sunday that only diplomacy can solve its conflict with the United States and Israel.
The Nifty 50 fell 0.33% to 23,064.9, while the BSE Sensex shed 0.22% to 73,734.83. Fourteen of the 16 major sectors logged losses. The broader small-caps and mid-caps fell 0.2% each. Brent crude futures climbed 2% to about $106.5 per barrel, while Asian markets were down 0.2%. India, which is the world's third-largest crude importer, remains vulnerable to higher prices as they can stoke inflation, raise the import bill, and drag corporate margins. Barring TCS and Tech Mahindra, all shares were trading in the negative zone in the 30-share BSE Sensex index. Here are top three reasons why the market is falling today:
Three Reasons Why Market Is Falling Today:
1.Brent Crude Oil Spike
Oil prices rebounded more than 1% on Monday after US President Donald Trump rejected a peace deal from Iran to resolve their conflict and reopen the Strait of Hormuz, keeping tensions in the Middle East elevated. Brent crude futures rose $1.32, or 1.27%, to $105.64 per barrel while US West Texas Intermediate crude was at $93.11 a barrel, up 70 cents, or 0.76%. Brent edged up 0.4% last week but WTI lost 7.9% on concerns that the US may ban diesel exports to ease record prices which could curb US refining output.
2.US Treasury Yields
Last week, the benchmark 10-year Treasury yield fell 0.37 basis points to 5.158%, after earlier reaching 5.2297%, the highest since 2007. The 30-year bond yield rose 2.63 basis points to 5.4883% and earlier reached 5.5319%, the highest since 2004. US Treasury yields have reached their highest levels since the financial crisis on persistent worries about higher inflation.
"Two apparently contradictory trends - in the economy and markets- deserve attention. The economy is resilient and corporate earnings are improving, but the market is steadily going down. This is a case of external headwinds overpowering domestic tailwinds. Brent crude at $106 and the US 10-year yield at 5.2% are strong headwinds that are weighing on markets,'' said Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd.
3. Us-Iran Geopolitical Conflict
Trump rejected a peace deal from Iran to resolve their conflict and reopen the Strait of Hormuz, keeping tensions in the Middle East elevated. Iran announced a peace proposal last week at the UN General Assembly in New York, saying it had been transmitted to the Americans via Qatari mediators. Trump said on Saturday he rejected the plan, but told Axios in a phone interview on Sunday that he expected US negotiators to engage in more talks this week. Yemen's Saudi-led coalition said early on Saturday it had intercepted two ballistic missiles and two drones launched by the Iran-backed Houthis towards the kingdom.
Technical Bias
Technically, the bias is neutral-to-cautious, and the undertone stays subdued as long as the index trades below 23,300. Immediate support lies at 23,000, and a decisive break would expose 22,800. With the September series expiring Tuesday, volatility could remain elevated. However, any progress on Hormuz talks could ease crude and help the index recover towards 23,300-23,450.
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