Sensex, Nifty are under pressure this Friday morning. Today’s trading session has turned into a rough one for Dalal Street . After opening in the red on negative global cues and soaring crude, selling pressure gathered pace across sectors, dragging benchmark indices as well as broader markets sharply lower. 

The weakness was not limited to large cap stocks. Small cap and midcap shares have also come under heavy selling.

At this hour, the Sensex was trading below 75,600, down more than 850 points, while the Nifty slipped below the 23,700 mark, losing around 250 points. Both the domestic indices are trading down over 1% each.

The selloff was even more pronounced in the broader market, with the Nifty Smallcap 100 falling 1.4%, the Nifty Midcap 100 declining 1%, the BSE Midcap Index dropping 1.5%, and the BSE SmallCap Index tumbling 2%.

What is driving today’s sharp decline? Here are the key factors weighing on market sentiment.

Crude oil surges above $100 a barrel

Oil prices have emerged as a major concern for the markets – 

Brent crude climbed above $100 per barrel for the first time since May after reports of attacks on Saudi oil tankers. The market is worried that shipping through the Bab el-Mandeb Strait, one of the world’s most important oil transit routes, could face disruptions.

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Dr V K Vijayakumar, Chief Investment Strategist at Geojit Investments added, “The attack on Saudi tankers by the Iran-backed Houthis in the Red Sea is the main reason for the recent sharp spike in Brent crude to about $100.”

For India, which imports most of its crude oil requirements, higher oil prices can increase import bills, widen the current account deficit and add inflationary pressure. These concerns often weigh on equity markets.

West Asia tension keep investors on edge

Another big trigger behind today’s weakness is the fresh escalation of tension across West Asia.

The US military said it had completed its 13th consecutive night of strikes on Iran, while Iran-backed Houthi rebels claimed responsibility for attacks on two Saudi oil tankers in the Red Sea. The group also announced a naval blockade targeting Saudi Arabia, raising fears that the conflict could spread further and disrupt global trade routes.

Weak rupee adds to market pressure

The Indian rupee has also remained under pressure.

The domestic currency opened at 96.63 against the US dollar, compared with the previous close of 96.5725.

Foreign investors remain cautious

According to Dr V K Vijayakumar, Chief Investment Strategist at Geojit Investments, the combination of rising oil prices, a weakening rupee and higher US bond yields has once again shifted foreign investors towards selling.

He said, “The total uncertainty and high volatility in markets continues without any signs of immediate respite.”

According to him, higher crude prices could revive India’s balance of payments concerns, while rising US bond yields also remain negative for global equity markets.

India VIX jumps sharply

At this hour, India VIX was trading around 14.65, up 8.71%. The VIX is a gauge of investor fear in the market. A sharp jump in the VIX indicates investor apprehension. 

Selling spreads across sectors

Among the Nifty sectoral indices, Auto, Digital, Metals, Realty, Consumer Durables, and Oil & Gas were all trading lower by around 1-2% during the session.

Heavyweights drag the indices lower

Several index heavyweights also contributed to today’s decline.

At this hour, Bajaj Finance was down around 3.09%, Eternal declined 2.95%, Infosys fell 2.91%, Bharti Airtel lost 2.71%, while InterGlobe Aviation (IndiGo) slipped 2.23%.

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