बलजीत सिंह शेखावत
The Indian stock market witnessed intense volatility on Wednesday. The market remained upbeat till noon before sudden selling pressure emerged.
Sensex and Nifty, which had risen nearly 1% in morning trade, erased all gains.
Sensex Plunges 1400 Points From Highs In Volatile Trade
Sensex and Nifty erased all initial gains amid heavy selling pressure. Rising crude oil prices, rising US bond yields, and foreign fund outflows pushed the stock market lower on Wednesday.
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HIGHLIGHTS
- Sensex plunged nearly 1,400 points from the day's high.
- BSE listed companies lost over Rs 8 lakh crore in market capitalization.
- Sensex closed down 143 points at 73,709; Nifty fell 77 points to 22,811.
- Brent crude surpassed $110 per barrel as US bond yields advanced.
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Sharp Drop From Day's Peak
The Sensex tumbled nearly 1,400 points from its intraday peak. This fall reduced the total market capitalisation of BSE-listed companies by over Rs 8 lakh crore.
However, the losses were trimmed slightly towards the market close.
Sensex and Nifty Closing Figures
- BSE Sensex fell 0.19% or 143 points to close at 73,709.
- NSE Nifty declined 0.34% or 77 points to end at 22,811.
Surge in Crude Oil Prices
Surging crude oil prices added to investor worries on Wednesday. Brent crude crossed the $110 per barrel mark again.
Meanwhile, WTI crude traded near $99 per barrel.
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Fears of supply disruptions in the Middle East and maritime route threats supported oil prices.
Maritime Incidents
According to the Iranian Revolutionary Guard navy, a supertanker caught fire after striking a marine mine south of the Strait of Hormuz.
Ship tracking firm Kpler stated that at least 18 ship attack incidents occurred over two weeks.
Rising US Bond Yields
A surge in US bond yields also caused anxiety in the equity markets.
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The 10-year US Treasury bond yield advanced to 5.12%, while the 30-year yield crossed 5.4%.
When returns on bonds increase, investors tend to move funds away from equities into bonds, pressuring stocks.
Rising yields generally accompany falling bond prices, reflecting the current strain.
Continued FII Outflows
Selling by Foreign Institutional Investors (FIIs) prevented the market rally from sustaining.
NSE data shows foreign investors sold equities worth Rs 1,149 crore on Monday.
In October, foreign investors have been net sellers in 10 out of 12 trading sessions.
Profit Booking at Elevated Levels
After early morning gains, investors booked profits at elevated levels.
Given geopolitical tensions, costly crude oil, and rising bond yields, investors are avoiding risk.
According to VK Vijayakumar, Chief Investment Strategist at Geojit Investments, elevated Brent crude and US bond yields may keep the market under pressure, and rallies could see selling.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Consult a financial advisor before making investments.
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