The Indian Stock Market on Friday recorded significant fall as the benchmark indices -- Sensex and Nifty -- fell over 1.8%, tracking global stocks and elevated
Brent crude prices. Sensex crashed 1600 points while Nifty gave up the critical 22,900 level. There were multiple reasons that led to the stock market fall including profit booking, global equity selloff, Crude trading above $100 per barrel, Indian rupee hitting record low, and the India VIX, the volatility gauge, trading higher. During the intraday trade, most of the stocks were trading in the red with the declines mainly led by banks, financials and auto sectors. However, the IT stocks remained positive. Global equity markets also remained under pressure for a second straight session.
What let to Indian stock market fall?
Profit booking:
Most of the investors booked profits after rally of 3.5% in equities over the last two sessions. Fifteen of the 16 major sectors logged losses. Nifty PSU Bank remained the worst hit with all the constituents traded lower. HDFC Bank and ICICI Bank were down 2% and nearly 1%, respectively.
Elevated crude oil prices
Global crude oil prices went down after heavy surge, but still remained above $100 per barrel level. The hike in prices of crude oil has led to upward revision of fuel prices in many part of the world.
Crude oil prices have spiked from around $70 per barrel to about $122 per barrel. As a result, petrol and diesel prices have increased globally.
Depreciating Rupee
Another key reason for the Indian stock market witnessing downfall was the continuous weakening of Indian Rupee. The Indian rupee hit a record low past the 94-per-dollar mark on Friday. Rupee has been reacting to the deepening pressure on energy importing economies.
Global equity selloff
The global markets are also feeling the heat of the ongoing Iran war leading to selloff. US equities slumped nearly 2% on Thursday, the 10-year US Treasury yield climbed past 4.4%. South Korea market slumped 2.7% while Taiwanese shares dropped 1.4%.
