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Indian Markets Plunge: Global Woes Hit Home
24 Sep
Summary
- Sensex dropped over 1,100 points, Nifty below 23,100.
- Investors lost Rs 3.54 lakh crore in a broad sell-off.
- Rising crude oil, US bond yields, and Iran-US tensions fueled decline.
The Indian stock market faced significant selling pressure on Thursday, leading to a substantial crash. The benchmark Sensex plummeted by more than 1,100 points, closing down 1,247 points at 73,580. Similarly, the Nifty slipped below the 23,100 mark, ending the day 384 points lower at 23,063. This widespread sell-off resulted in investors losing Rs 3.54 lakh crore in a single day.
The market's weakness is attributed to a confluence of global and domestic pressures. A primary concern is the surge in US Treasury yields, with the 10-year yield reaching its highest level since 2007, nearing 5.11%. This rise, coupled with stronger US economic data, has increased expectations that the US Federal Reserve might maintain higher interest rates for an extended period.
Furthermore, crude oil prices have surpassed the $100 a barrel mark, a significant worry for India, a major oil importer. Rising crude prices can inflate the country's import bill, pressure inflation, and impact the rupee's value. Adding to the uncertainty are renewed tensions between Iran and the US, which could disrupt oil supplies and further escalate prices.
Domestically, financial stocks bore the brunt of the sell-off. Proposed changes by the insurance regulator regarding commissions and distribution payouts triggered significant declines in insurance distributors, banks, and non-bank lenders. This downturn in the financial sector, which holds substantial weight in the indices, directly contributed to the sharp fall in both the Sensex and Nifty.
