Indian stock markets fell sharply on Monday due to tensions between Iran and the US and weak global cues. The Sensex fell over 700 points (nearly 1%) to a low of 77,445, while the Nifty 50 fell over 180 points to close at 24,150.
Let’s find out what are the 6 main reasons due to which the stock market crashed.
1. Rising Iran-US tensions: Tensions between Iran and the US escalated over the weekend, with reports of explosions on oil tankers passing through the Strait of Hormuz.
2. Oil prices above $90: Brent crude futures rose more than 3% to near $91 a barrel due to rising geopolitical tensions, which has severely impacted supply.
3. Weak signals from global markets: Asian markets (Japan and South Korea) saw sharp declines of up to 4% and weak Wall Street signals directly impacted Dalal Street.
4. Sell-off in bank stocks after poor Q1 results: Shares of Axis Bank and HDFC Bank fell by around 5% after quarterly results fell short of expectations.
5. Increase in bond yields: A rise in US Treasury yields dampened equity market sentiment, with the yield on the 10-year note rising to 4.551%.
6. Weakness in Rupee: The rupee fell 11 paise to 96.41 against the US dollar, mainly due to higher crude oil prices and cautious foreign fund inflows.
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