Why Is Share Market Falling Today? Key Reasons Behind Sensex, Nifty Crash On September 11

Why is the stock market falling today, September 11: The domestic equity markets opened sharply lower on Friday, with the Sensex falling over 700 points and the Nifty slipping below the 23,250 mark amid broad-based selling across sectors. At 9:18 am, the BSE Sensex was trading at 74,200.96, down 701.63 points or 0.94%, while the NSE Nifty was at 23,237.75, down 239.05 points or 1.02%.

The selling was broad-based, with midcap and smallcap stocks also coming under pressure. The Nifty Next 50 declined 1.45%, while the Nifty Midcap 100 and Nifty Smallcap 100 fell 1.28% and 1.22%, respectively.

Key factors behind market decline today

Crude oil surge and West Asia tensions: The biggest trigger for the sell-off is the sharp rise in crude oil prices. Brent crude has climbed above $108 a barrel

as the conflict in West Asia has intensified, with disruptions around the Red Sea and Strait of Hormuz raising fears of tighter oil supplies. For India, which depends heavily on imported crude, higher oil prices can widen the import bill, put pressure on inflation and hurt corporate margins.

Rupee under pressure: The oil shock is also weighing on the Indian rupee. The rupee on Friday opened lower by 18 paise at 95.70 against the US dollar, compared with the previous close of 95.52. A weaker currency makes India’s dollar-denominated imports, particularly crude, more expensive and adds to concerns about inflation and the current account.

Global risk-off mood: The sell-off is not limited to India. Asian markets opened sharply lower, with Japan’s Nikkei and South Korea’s Kospi falling around 2.6% and 2.7%, respectively. US equities also declined on Thursday as investors worried about rising oil prices and inflation.

US bond yields nearing 5%: Rising oil prices are reviving inflation concerns globally. The US 10-year Treasury yield has moved close to 5%, making US fixed-income assets more attractive and adding pressure on emerging-market equities. Higher yields also raise concerns that the US Federal Reserve may have less room to ease monetary policy.

The benchmark 10-year Treasury yield climbed 2 basis points on Friday to 4.9708%, its highest in three years and just shy of the closely watched 5% level, raising financial costs for the $40 trillion US government debt. The 30-year yields scaled another 19-year top of 5.3803%, lifting US mortgage rates and hamstringing the housing market.

Foreign investor selling: Foreign investors have remained a source of pressure for Indian equities. FPIs sold Rs 438 crore of Indian shares on Thursday, taking their September selling to around $1.36 billion, according to Reuters. Continued foreign outflows can amplify the pressure on benchmark stocks.

Broad-based selling in domestic stocks: Today’s decline is not confined to one sector. Metal, realty, financial services, auto and consumer durable stocks are among the biggest losers. The Nifty Metal index is down nearly 3% in early trade, while Nifty Realty has fallen more than 2%. Banking and financial stocks are also under pressure, dragging the headline indices lower.

IT stocks face a separate overhang: IT is relatively stronger today, but the sector continues to face uncertainty after a US proposal to remove the 60-day grace period for H-1B visa holders. This adds another layer of concern for Indian IT companies that have significant exposure to the US market.