Stock Market Crash: Over 700 Billion Rupees Lost Due to Crude Oil Price Hike and Trump's Decisions

On Thursday, as the trading session began on the stock market, a crash occurred. Both market indices plummeted. The BSE Sensex index, comprising 30 stocks, fell by more than 700 points from the opening, while the NSE Nifty index, moving in sync with the Sensex, also sharply declined. NSE Nifty lost over 200 points immediately after opening.

Amid this crash, many stocks, including shares of Reliance, HDFC Bank, Axis Bank, and Indigo, were in the red zone. Particular attention was drawn to the NSE IPO, which is set to debut at 10 am amidst this market turmoil.

At the start of trading on Thursday, the BSE Sensex opened at 74,272, lower than the previous close of 74,828. During the entire five-minute trading period, the Sensex began a rapid decline, reaching 74,120 with a drop of over 700 points.

As for the Nifty index, which consists of 50 stocks, it followed the example of the Sensex. Nifty opened at 23,221, below the previous close of 23,446, and then continued to fall, trading at 23,205, losing more than 200 points.

In the context of the stock market crash, shares of companies such as Reliance and HDFC Bank opened in the negative. Among the most heavily falling stocks in the BSE large-cap segment were Bajaj Finance Share (down 5%), Axis Bank Share (down 3.70%), Bajaj Finserve Share (down 3.50%), and Kotak Bank Share (down 2%).

A decline was also observed in the mid-cap category: Policy Bazar Share (down 10%), MFSL Share (down 9.10%), AU Bank Share (down 5%), IDFC First Bank Share (down 3.30%), and Yes Bank Share (down 2.60%).

Despite the devastating events in the stock market, the NSE shares debut will take place. This situation has caused concern among investors. It should be noted that the NSE IPO, valued at ₹22,561.57 crore, was open from September 17 to 21 and received a positive response from investors. Nevertheless, in the 'grey money' market, this IPO signals a sluggish listing, as the NSE IPO GMP is only about 2% just before listing.

The reasons for the stock market decline are linked to deteriorating sentiment in American and Asian markets. In the previous trading day, the Dow Jones fell by 250 points. This was due to US Treasury yields on twenty-year bonds reaching a two-decade high. Furthermore, crude oil prices continue to rise in the international market, trading above $100.

Despite strong growth in the American stock market on Monday, the Indian market showed a decline on Tuesday. Following trading, the 30-stock Sensex index closed at 74,529.08 points, falling by 329.91 points, or 0.44%. Meanwhile, the Nifty 50 decreased by approximately 85 points, amounting to 0.36%, and finished at 23,329.00.

On Tuesday, the trading session of the Indian stock market started promisingly, but then a gradual decline was observed. At one point, Nifty dropped to 23,285.75. Nifty opened at 23,454.05 and reached a high of 23,489 points during trading.

The unexpected change in investor sentiment in the Indian market, despite positive signals from global markets, surprised them. Even with falling crude oil prices, on September 22, selling pressure was observed in the Indian stock market. On the second day of the week's trading, the market closed in negative territory due to sell-offs in the IT, banking, and consumer goods sectors.

On the day of the weekly expiry, Nifty Sensex fell by approximately 600 points from its daily high, causing Nifty to drop below 23,300. The Nifty Midcap 100 and Nifty Smallcap 100 indices also closed in the red, with most key sector indices remaining negative on Tuesday. The total market capitalization of companies listed on BSE fell by more than 200 billion rupees, which means investors lost 200 billion rupees.

Nevertheless, some stocks showed good growth. Among them were a rise of Kol India by approximately 3.2%, an increase in Indigo by 1.8%, an increase in Eternal by 1.8%, and a strengthening of Titan shares by approximately 1%.

Speaking of the main falling stocks, financial and consumer stocks exerted the greatest pressure on the market. Bajaj Finserv fell by 1.4%, Tata Consumer dropped by 1.6%, Trent fell by 1.2%, and Bajaj Finance shares showed a decrease of 1.2%.

The index declined due to a broad sell-off in the IT, banking, financial services, and capital goods sectors. Despite the price of Brent Crude falling to approximately $100 per barrel for four consecutive sessions, the market could not recover.

The main reasons cited for the market decline are the withdrawal of funds by foreign investors and geopolitical uncertainty, which continue to affect market sentiment. Additionally, concerns remain regarding inflation and import costs.

A new crisis in the stock market is possible, as evidenced by signals coming from abroad. In particular, two decisions made in the United States are causing concern among investors in India. Furthermore, the collapse of the American stock market and the movement of Gift Nifty indicate a probable significant decline in the Sensex-Nifty index. After two days of growth, the market has once again faced a threat.

After a period of prolonged stagnation, the market began to show activity. Previously, there was a continuous downward trend in the stock market. For example, before the start of the current week, the Sensex with 30 stocks and Nifty with 50 stocks showed a drop of more than 2%, leading to substantial losses for investors. However, over the last two trading days, the dynamic changed, and investors felt relief due to the rise of Sensex-Nifty. Nevertheless, new signals received by the market cast doubt on this relief.

Two of the most significant signals pointing to a potential stock market crash are related to the US. Firstly, the US Federal Reserve announced an interest rate hike. At the Fed meeting led by Kevin Powell, the interest rate was increased by 25 basis points, or 0.25%. As a result, the federal rate in the US reached the range of 3.75% to 4%.

The second major factor is the expected approval in the US Senate of a bill that introduces new sanctions against Russia. This step is causing tension in India. According to this provision, US President Donald Trump will gain the right to impose tariffs of up to 100% on countries importing oil and gas from Russia, and India is among the major buyers of Russian oil.

The third indicator signaling a possible crash comes from Gift Nifty, which is considered a key indicator for Sensex-Nifty and reflects the state of the American stock market. Following the announcement of interest rate hikes in the US, the Dow Jones index plummeted in the previous trading day, showing a sharp drop of 1.21% or 631 points. Moreover, Gift Nifty traded in the red zone since the beginning of Thursday, indicating deteriorating sentiment in the Indian stock market.

The indices of the Indian stock market, Sensex-Nifty, closed with strong growth on the previous trading day, Wednesday. The BSE Sensex finished trading at 74,336.45 points, demonstrating a rise of 332.63 points during the day. The NSE Nifty closed at 23,217.60 points, showing a drop of 99 points. However, signals from abroad indicate that this sharp rise may be followed by a significant decline on Thursday.