Dalal Street Faces 3000-Point Decline in a Month Due to US-Iran Tensions
MUMBAI: The Sensex dropped 555 points to close at 75,577 points on Tuesday, driven by rising crude oil prices amid escalating tensions between the US and Iran. The Nifty also fell, losing 144 points to end at 23,635 points, as foreign investors continued to sell Indian stocks. In the past month, the Sensex has lost nearly 3,000 points, or 3.8%, while the Nifty has declined by 949 points, or 3.9%.
Foreign Selling Pressures Market
Since August 10, foreign investors have net bought Indian stocks worth just Rs 2,953 crore, according to data from NSDL and BSE. However, in September alone, foreign funds have net sold stocks worth approximately Rs 12,700 crore, reversing the trend seen in the previous two months. This selling pressure coincides with a weakening rupee, which is approaching the 95-to-the-dollar mark.
Market analysts note that the renewed hostilities in the Persian Gulf have prompted investors to adopt a low-risk stance towards equity assets. Ankur Punj, MD of Equirus Wealth, stated that the domestic markets mirrored weak global cues, leading to declines in banking, IT, oil and gas, and real estate sectors. The day’s losses resulted in a decline of about Rs 35,000 crore in investor wealth, with BSE’s market capitalization now at Rs 486.2 lakh crore.
Sector Performance and Currency Impact
Among the Sensex stocks, ICICI Bank, HDFC Bank, and Reliance Industries were the largest contributors to the day’s losses. Conversely, buying interest in BEL, Hindustan Unilever, and Adani Ports helped to cushion the fall. In the forex market, the rupee weakened to close at 94.83 to the dollar, down 34 paise for the day. Dilip Parmar of HDFC Securities attributed the rupee’s decline to persistent risk-off sentiment and rising oil prices, as aggressive dollar-buying outpaced liquidity.
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