Sensex Dips Over 500 Points, Nifty Below 23,500: Why Is The Stock Market Down Today?

Benchmark indices Sensex and Nifty opened sharply lower on 11 September as a jump in crude oil prices and rising tensions in West Asia pushed investors away from riskier assets. Fifteen of the 16 major sectors declined in early trade. At 10:13 am, the Sensex and the Nifty 50 were down 0.71% and 0.80%, respectively.

Why Is The Stock Market Down Today: 3 Reasons For Decline

Here are the reasons as to why the market is down today:

1. West Asia Tensions Drive Oil Prices Higher

This is one of the major reasons as to why market is down today. Iran-aligned Houthis seized control of Yemen’s port city of Mocha on Thursday and moved down the Red Sea coast towards strategic islands, according to military sources.

The development came hours after US President Donald Trump said he expected the war with Iran to end after the US midterm elections. The latest military developments have added to concerns over shipping through the Red Sea. Traffic through the Strait of Hormuz also remains restricted, while attacks on tankers have increased. This has pushed crude prices up. At 10:15 am, Brent oil futures for November stood at $107.87 per barrel. On the other hand, the West Texas Intermediate (WTI) crude oil futures for October stood at $102.45 per barrel.

2. Rise In US And Indian Bond Yields

Higher oil prices have also pushed up concerns around inflation, interest rates and bond yields. US Treasury yields rose to multi-year highs on Thursday ahead of next week’s Federal Reserve meeting. The benchmark 10-year US Treasury yield rose 0.104 percentage points to 4.943%, its highest level since October 2023.

Indian government bonds also came under pressure in early trade on Friday. The benchmark 10-year yield moved above 7%, reaching a more than three-month high as rising crude prices and higher US yields weighed on demand.

3. FII Selling Adds To Pressure

This is another reason as to why is the stock market falling. Foreign institutional investors (FIIs) remained net sellers in Indian equities on 10 September. FIIs sold shares worth ₹438.24 crore, while domestic institutional investors (DIIs) bought equities worth ₹1,025.86 crore.

The selling trend from foreign investors has added to the pressure on the domestic market as global risk factors remain elevated.

Market Outlook

Markets may remain volatile in the near term as investors keep a close watch on the Iran-US conflict, crude prices and FII flows. Brent crude going above $100 a barrel could add to inflation and rupee concerns.

Also Read - Canara Bank To Raise ₹4,500 Crore Through AT-1 Bonds Next Week