Why indian market is falling today: The Indian stock market took a sharp turn lower in afternoon trade today, October 1. The benchmark indices, which had started the session relatively flat but lower, came under heavy selling pressure as the day progressed.
The Sensex plunged over 1,100 points during the intraday session and slipped below the 71,400 mark. The Nifty 50, meanwhile, fell more than 380 points or 1% and moved below 22,300.
The weakness was not restricted to large-cap stocks. The BSE MidCap index fell more than 1.5%, while the Nifty Smallcap 100 and Nifty Midcap 100 also declined more than 1%.
What changed during the day? Here are reasons why stock market is falling today in india.
Foreign investor selling remains a major drag
Foreign portfolio investor (FPI) selling continues to weigh on Indian equities. According to the latest data, foreign investors sold Rs 10,148 crore worth of Indian equities on September 30. It was their biggest single-day outflow in nearly six months.
This took their total selling in September to around Rs 51,999 crore. Domestic institutional investors (DIIs), however, continued to provide support. They bought Rs 11,272 crore of equities on September 30, taking their September purchases to around Rs 80,619 crore.
US bond yields add pressure
The rise in US bond yields is another factor investors are watching closely. Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Investments, said, “The sustained FII selling became intense during the last two trading days when the FIIs sold equity for a total of Rs 20128 crores.”
He added that the US 10-year bond yield has risen to 5.3%, which could encourage foreign investors to remain cautious about emerging markets such as India.
According to Vijayakumar, this appears to be a short-term phase, with market conditions potentially improving if crude oil prices decline.
Crude oil remains a key trigger
Crude oil is another major variable for Indian equities. Brent crude futures slipped towards $98 a barrel after Tehran said it had received Washington’s response to its latest ceasefire proposal.
However, crude prices remained volatile. Brent was up around 1.5% in Asian trade. For India, higher crude prices can increase the country’s import bill and put pressure on inflation and corporate margins. This makes oil prices an important market trigger.
Auto sector stocks see big sell-off
The selling became particularly sharp in automobile stocks. The Nifty Auto index plunged more than 4%, making it one of the worst-performing sectoral indices.
Metal, realty and consumer durables stocks also faced heavy selling, with several sectoral indices falling around 2-3%.
Among individual stocks, Mahindra & Mahindra, Maruti Suzuki, Adani Ports, UltraTech Cement, Tata Steel, ITC, Hindustan Unilever, BEL declined around 3-4%.
Volatility shoots up
The rise in market volatility added another layer of pressure. The India VIX, which tracks expected volatility in the stock market, jumped more than 12% to 15.12 as the sell-off intensified.
For now, the combination of heavy foreign selling, elevated US bond yields, crude oil uncertainty and broad-based sectoral selling is keeping the market under pressure.