Live Events
1) Rupee breaches 94-mark, hits fresh record low
2) Iran-US war drags on
3) Oil prices remain elevated
4) Weakness in global markets
5) FII selling continues
6) US bond yield rises
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Stock markets crashed on Friday, with the Sensex plunging nearly 1,700 points and Nifty closing below 22,850. The decline followed a strong two-day rally of over 3.5% in the benchmarks. A record-low rupee , along with fading hopes of a de-escalation in the Iran–US conflict, weighed on sentiment and brought bears back to Dalal Street.Sensex declined around 1,690 points to 73,583, while Nifty 50 fell 487 points to 22,820. The sharp decline wiped off nearly Rs 9 lakh crore from the total market capitalisation of all companies listed on BSE , dragging it down to Rs 422 lakh crore.Reliance Industries (RIL) shares were the top losers on Sensex, falling nearly 5%. IndiGo, Bajaj Finance, Zomato-parent Eternal, State Bank of India (SBI) and HDFC Bank were also among the top losers, falling 3-4%. Bharti Airtel, TCS and Power Grid were the only gainers.All sectoral indices on NSE closed in the red. Nifty PSU Bank was the top loser on the stock exchange, falling nearly 4%. Nifty Realty index fell over 3%, while Nifty Auto, Nifty Financial Services and a few others fell nearly 3%. This came as India Vix, which measures volatility in markets, jumped around 9%. Around 2,814 stocks declined on NSE, while 505 advanced and 71 remained unchanged.Here are the key factors impacting markets today:Indian rupee saw a sharp decline, hitting a record low of 94.8125 against the US dollar. “The continuation of the conflict in Iran and sustained selling by the FPIs contributed to the weakness in the rupee, said VK Vijayakumar, Chief Investment Strategist at Geojit Investments. “Despite the decline in Brent crude and intervention by the RBI the rupee continues to decline mainly on concerns of more capital flight from India stemming from FPI outflows,” he added.“Despite initial signs of US–Iran talks, the Strait of Hormuz continues to face disruptions, keeping supply risks intact and supporting higher crude prices. This sustained crude risk is directly impacting India’s import bill expectations, keeping the rupee under pressure. The broader bias remains weak unless energy supply normalises meaningfully,” said Jateen Trivedi, VP Research Analyst of Commodity and Currency at LKP Securities.Despite bleak assurances from US President Donald Trump, the war between Iran and US-Israel continues to rattle global markets. Trump reiterated that talks with Iran were going “very well”. However, an Iranian official quoted by Reuters said that US' proposal for ending the war was “one-sided and unfair”.Trump announced late on Thursday that he is postponing an attack on Iran’s energy facilities as he delayed the deadline for Tehran to open the Strait of Hormuz to April 6. However, markets now seem to doubt the de-escalation expectations which had earlier triggered a two-day rebound on Dalal Street.After cooling off slightly in the morning, oil prices resumed their skyrocketing rally in the afternoon. Brent crude futures gained 1.7% to trade at nearly $110 per barrel, while WTI Crude jumped 1.6% to $95.94 per barrel.Notably, the selloff in Indian stock markets intensified in the second half of the day, along with the sharp surge in oil prices. Meanwhile, government reintroduced windfall taxes on diesel and ATF exports, while pushed down heavyweight Reliance Industries shares.Wall Street on Thursday recorded its worst day since the beginning of the war in the Middle East, amid growing doubts over possible de-escalation. S&P 500 sank 1.7%, while the tech-heavy Nasdaq declined more than 2%. The Dow Jones, meanwhile, fell more than 1%.Asian markets were mostly in the red on Friday. South Korea’s Kospi and Japan’s Nikkei were down over 0.4% each. China’s Shanghai Composite and Hong Kong’s Hang Seng, meanwhile, were up marginally.European stock markets were also hovering in the red, with Germany’s DAX falling more than 1%. UK’s FTSE falling 0.5% and France’s CAC fell 0.7%.Persistent selling by foreign investors remains a key concern. FIIs remained net sellers on Indian equities for the 19th consecutive session, net selling shares worth nearly Rs 1,805 crore on Wednesday, according to data on NSE. While this does not reflect today’s activity, sustained outflows in recent sessions have weighed on investor sentiment.US bond yields rose amid fading hopes for de-escalations in the raging war between Iran and US-Israel. The 10-year US Treasury yield climbed 4 basis points to cross 4.42% on Friday. The two-year US treasury yield, which is highly sensitive to expectations around rate cuts by the Federal Reserve, meanwhile remained elevated at 3.98%. Rising bond yields tend to make government securities more attractive relative to equities, potentially putting pressure on stock markets.The on and off reaction of the market to news and events regarding the war is likely to continue in the near-term, said VK Vijayakumar, Chief Investment Strategist at Geojit Investments, who added the elevated crude prices have triggered another round of risk-ff sentiment in the Indian stock markets.However, the analyst said that the market correction since the beginning of the war has brought Nifty valuations to fair levels. Nifty is now trading at about 19 times, which is lower than the last 10-year average of 22.4 times, he said, adding, “But if India’s macros take a hit due to this energy crisis, valuations may again decline, factoring in the feared hit to earnings growth in FY27.”“The Indian economy is strong enough to absorb the shock if the war ends, crude cools down and gas availability becomes normal. But if the war prolongs, crude remains elevated for months together, and gas availability constraints continue, the stress on India’s macros will be significant and the market will discount that. In brief, everything boils down to how long the war will last. The market hope is that since a prolonged war is in nobody’s interests, it may end soon. The US itself is now looking for an exit strategy. Market corrections and rising retail price of petroleum products may exert pressure on the US regime to cool down the conflict,” he added.The Nifty 50 index is trading below the 21-hour EMA, indicating sustained short-term bearish momentum, said Rupak De, Senior Technical Analyst at LKP Securities, who added that the RSI has entered a bearish crossover, reinforcing the negative bias.“Given the prevailing market uncertainties, a sell-on-rise approach may remain suitable in the near term. Technically, any rebound towards 23,500 could face selling pressure, as this level is likely to act as an immediate resistance. On the downside, a break below 22,800 may lead to further weakness in the market,” he said.“Going ahead, the immediate support for Nifty is placed in the 22650-22600 zone. Any sustainable move below this zone could result in Nifty extending its weakness towards 22400, followed by 22200 in the short term. On the upside, the zone of 23150–23200 zone is likely to act as a strong resistance,” said SBI Securities.(With inputs from agencies)(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)