Stock Market CRASH: The Indian stock market remained under pressure on Monday, July 20, with both benchmark indices trading lower in the morning session amid weakness in banking stocks, subdued global cues, geopolitical tensions, and rising crude oil prices.
As of 10:15 am, the BSE Sensex was down 508 points, or 0.7 per cent, at 77,639.31, while the NSE Nifty 50 declined 125 points, or 0.5 per cent, to 24,209.20.
Among the Nifty 50 constituents, JSW Steel, Trent, and NTPC were the top gainers, whereas Axis Bank and HDFC Bank emerged as the biggest laggards, dragging the benchmark lower.
Market sentiment remained subdued due to the following key factors:
1. Bank Nifty drops over 1% after earnings
The Nifty Bank, which tracks the performance of the country’s leading banking stocks, declined 1.3 per cent to 57,779.20. Of the 12 constituents in the index, gains and losses remained broadly split, but heavyweights such as HDFC Bank, Axis Bank, ICICI Bank, Kotak Mahindra Bank, and Yes Bank witnessed selling pressure following their recent quarterly earnings announcements.
Given the significant weight of banking stocks in the benchmark indices, weakness in the Bank Nifty exerted considerable pressure on both the Sensex and the Nifty.
2. Weak global cues weigh on sentiment
Investor sentiment was also impacted by weakness across global markets. Asian equities traded lower, reflecting a cautious risk-off mood among investors. The South Korean equity index, the KOSPI, was trading over 3.5 per cent lower, down 241 points, at 6,579.23.
Softness in overseas markets often influences domestic equities, as global risk aversion prompts foreign investors to trim exposure to emerging markets, including India.
3. Geopolitical tensions keep investors on edge
Geopolitical uncertainty continued to weigh on market sentiment after the US Central Command (CENTCOM) reportedly launched another round of strikes against Iran, marking the ninth consecutive night of military operations.
Escalating tensions in the Middle East have increased risk aversion among investors, leading to broad-based selling across equity markets.
4. Rising crude oil prices raise inflation concerns
The ongoing Middle East conflict has pushed crude oil prices higher, with Brent crude trading above the USD 90 per barrel mark, while WTI crude hovered around USD 84 per barrel.
Higher crude prices are a concern for India, a major oil importer, as they can fuel inflation, widen the current account deficit, and increase input costs for businesses. Elevated inflation expectations also raise the possibility of tighter monetary policy, which could weigh on corporate earnings and equity valuations.
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(Disclaimer: The above article is meant for informational purposes only and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money-related decisions.)
