The Indian stock market has experienced a significant fall today, with both the Nifty 50 and Sensex showing considerable declines. Investors and traders are closely watching the evolving global and domestic market conditions as they try to understand the reasons behind this drop.
In today’s session, both indices opened lower, reflecting negative sentiment from the start. As trading continued, selling pressure increased, causing further declines in the indices. This led to a sharp fall in intraday gains for both the Sensex and Nifty, highlighting the cautious mood among market participants
Index Overview
The Nifty Index opened at Rs. 24,734.25, with a gap-down of up to 0.26 percent from its previous close of Rs. 24,800.40, and the index has recovered and corrected almost 50 percent from the day’s low of Rs. 24,462.40
The Sensex Index opened at Rs. 81,323.24, with a gap-down of up to 0.28 percent from its previous close of Rs. 81,556.56, and the index has recovered and corrected almost 50 percent from the day’s low of Rs. 80,489.92.
Reason for the Fall
Rising conflicts in the Middle East
The rising tensions between Iran and Israel have made investors more cautious. According to CNN, the US has new intelligence suggesting that Israel may be preparing for a possible military strike on Iran’s nuclear facilities. At the same time, Reuters reported that Oman’s foreign minister announced that another round of nuclear talks between Iran and the US is planned for later this week.
Worries about the U.S. economy after Moody’s downgrade
Investor confidence has been shaky since Moody’s downgraded the U.S. credit rating last Friday because of worries about America’s rising debt, which now stands at $36 trillion. This downgrade has made investors around the world more cautious, leading to declines in both U.S. and Asian markets.
Markets are also watching a new tax bill that could add $3.8 trillion more to the U.S. debt, and experts like Dr. VK Vijayakumar say the main issue is that the U.S. government keeps running high deficits, which many see as unsustainable.
Mixed Q4 earnings that didn’t encourage investors
Kotak Securities said that the Q4FY25 earnings season has been mostly flat, with Nifty-50 companies’ net profits rising by just 7.5 percent compared to last year. Most major sectors showed a mix of growth and profitability problems, along with a weak outlook.
Consumer companies saw slow sales and pressure on margins, investment companies faced margin issues, banks reported slow loan growth, and IT services companies pointed to weak demand, all of which kept market sentiment weak.
Technical Correction After Sharp Rally
Rupak De, Senior Technical Analyst at LKP Securities, explained that the Nifty dropped due to global weakness linked to fresh discussions on the U.S. tax bill. On the technical side, the index struggled to move past resistance at the 200-hour moving average and found support near the 21-day EMA at 24,445.
As long as the Nifty stays below 24,800, the short-term trend is likely to remain weak, and any upward moves could face selling pressure. If the index falls below 24,445, the decline could speed up, but if it rises above 24,650, it may have a chance to move toward 24,775–24,800.
U.S. Treasury Yield Spike
Yields on long-term U.S. Treasury bonds have climbed to their highest levels in 18 months, with the 30-year yield staying above 5 percent after reaching a 1.5-year high in Asian trading.
When U.S. Treasury yields rise, they often attract global capital away from stock markets, especially in emerging economies like India, making equities less attractive to investors. This shift in investment preference is one of the reasons why Indian markets are feeling pressure as global bond yields surge.
Written by Sridhar J
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