Sensex Down 800 pts, Nifty Trades Near 24,000 Levels: Five Key Reasons Behind Today’s Market Fall

The Indian equity markets witnessed heightened selling pressure during the morning trade today amid escalation in India-Pakistan tensions. Sensex tumbled 800 pts, while the Nifty 50 fell below the 200-day exponential moving average (200-DEMA) support at 24,050 levels.

The Nifty opened at 23,935, but fell close to the 24,000 levels. Sensex opened lower at 78,968, but bounced back and regained the 79,000 level. Selling activity was extensively reported in major bank stocks as Bank Nifty opened lower at 53,595 and touched an intraday low of 53,525.50 within a few minutes of the Opening Bell.

Why are equity markets down today?

Avinash Gorakshkar, Head of Research at Profitmart Securities, said, “It's true that the Indian stock market is falling, but we can't call it a crash as the Nifty 50 index is still above 24,000 levels. However, it's for sure that the market has become highly volatile after India’s drone strikes in Pakistan. The India-Pakistan conflict has gone beyond the market estimates, and hence, investors are not in the mood to take any risk when the US Dollar Index has regained the crucial 100 levels. Crude oil prices have also surged, and major Asian indices like Shanghai and Hang Seng are under pressure.”

Let’s have a look at the key reasons of today’s fall

1. Escalation of cross-border tensions between India and Pakistan

Avinash Gorakshkar said, “The escalation in the India-Pakistan conflict after India's drone strikes in Pakistan has raised fears of an India-Pakistan war. Earlier, the market was expecting a surgical strike-like retaliation from the Indian government, but the tension seems more prolonged than expected earlier.”

2. No outcome from India-US trade talks

“Despite soon coming breakthrough claims from both sides, there is no such concrete evidence of a fruitful outcome from the India-US trade deal talks. So, the tariff uncertainty is still persisting, and hence, investors are not in the mood to keep their money in risky assets like equity,” said Gorakshkar.

3. Value buying in crude oil price

Anshul Jain, Head of Research at Lakshmishree Investment and Securities said, “After the fall in the crude oil prices from around $75 per barrel to around $60 per barrel in the international market, some value buying is taking place in the black gold. This is also a reason for investors squaring off their positions in the Indian equity market.”

4. Surge in US dollar exchange rates

“After the 90-day pause in Trump's tariffs, the US dollar index witnessed a sharp decline and came around 98 levels. However, the American currency has once again become bulls' favourite and the US dollar index has regained the crucial 100 levels, which is also a major trigger for selling pressure on Dalal Street,” said Anshul Jain.

5. Weak global market sentiments

According to Avinash Gorakshkar of Profitmart Securities, Asian markets appear weak, with the Shanghai and Hang Seng indices trading in the red since morning. This is prompting Dalal Street investors to square off their positions.