The Indian stock market traded sharply lower on Friday, extending its decline to the fourth consecutive trading session, weighed down by selling across the board, amid weak global cues.
The benchmark BSE Sensex declined over 700 points, and the NSE Nifty 50 dropped over 1% to slip below 22,400 level. The Bank Nifty index also plunged more than 1%.
The Sensex fell as much as 797.02 points, or 1.08% to an intraday low of 72,452.37, while the Nifty 50 declined as much as 315.65 points, or 1.39% to the low of 22,372.00 level.
Broader markets continue to bleed, with Nifty Smallcap 100 index and Nifty Midcap 100 index crashing over 3% each.
All the sectoral indices were trading in the red, with Nifty Metals, Nifty Realty, Nifty Auto, Nifty FMCG, Nifty Oil & Gas and Nifty Media falling the most.
Here are five key reasons behind the fall in the Indian stock market today:
Crude Oil Prices Above $114
Crude oil prices rose over 1% on concerns over further disruption to energy supplies from the Middle East after Houthi attacks in Saudi Arabia.
Brent crude futures surged 1.2% to $114.47 a barrel, while US West Texas Intermediate crude futures rallied 1.4% to $100.84.
Escalating Geopolitical Tensions In West Asia
The war in West Asia continue to escalate, with no signs of peace deal, weighing on investor sentiment. Clashes were reported between the Houthis and a Saudi-led coalition that backs Yemen's internationally recognised government.
US President Donald Trump has also warned Iran, saying he may “go a little further” to ensure Tehran never acquires a nuclear weapon.
On the other hand, The Wall Street Journal reported that Iran has warned that if the US and Israel resume strikes on its territory, it will retaliate and target airports, pipelines and other civilian infrastructure in neighbouring West Asian countries, along with American military bases.
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Sharp Selloff In Global Markets
Global markets reeled under selling pressure, with South Koran markets dropping over 3% on Friday in Asia.
Overnight on Wall Street, the US stock market ended mostly lower on Thursday, with the Nasdaq slipping over 2%, posting its steepest daily drop since early June.
Losses in global markets were led by selloff in technology stocks on fresh fears about the AI spending race. The Philadelphia SE Semiconductor Index sank 6.7%, its biggest daily percentage drop since June 23.
FII Selling Spree Continues
Foreign investors continue to their selling spree in the Indian stock market. FIIs sold Rs 3,458.70 crore of Indian shares on Thursday, data on stock exchanges showed. FIIs' total selling in the cash market in October so far has crossed Rs 52,000 crore.
Technical Supports Breached
The benchmark Nifty 50 slipped below the key support zone of 22,500 level.
Sudeep Shah, Vice President - Technical and Derivatives Research at SBI Securities said that the next support zone for Nifty 50 index lies at 22,300 – 22,320, while the resistance lies in the zone of 22,610 – 22,630.
“On the downside, if the index slips below the level of 22,300, then the next support is placed in the zone of 22,130 – 22,150. In an event of a surge above 22,630, the index can experience an extension of the rally towards 22,780,” said Shah.
On the options front, meaningful call writing witnessed across 22,500 and 22,600 strikes. On the put side, 22,400 has a substantial open interest, followed by 22,300 strike.
For Sensex, key support is seen at 72,300 level, while resistance is at 73,200.
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