Dalal Street has taken a sharp turn today, April 9, after a strong rally in the previous session,
The benchmark indices, Sensex and Nifty, slipped deep into the red, reversing a large part of recent gains.
In late trade, the Sensex dropped over 1,100 points or 1.5% to around 76,423. Similarly, on the other side, the Nifty fell below the 23,800 mark, down over 250 points or 1.2%.
The key losers at this hour include IndiGo, Jio Financial Services, L&T, Shriram Finance, and HDFC Bank, which are down between 2-3%, among other stocks. Furthermore, the major sectoral losers include financials, consumer durables, and oil & gas.
Investor sentiment turns cautious
Given the sharp u-turn in investor sentiment we reached out to a host of experts to decode the key concerns now –
Siddhartha Khemka, Head of Research, Wealth Management, Motilal Oswal Financial Services highlighted, “After the sharp gains seen yesterday, profitbooking was expected given the ceasefire disruption. This apprehension is making investors cautious. As a result of this concern, we are seeing significant selling pressure on the street.”
Market veteran Deepak Jasani reiterated the same concerns and pointed out that, “The optimism that we saw yesterday was short-lived. The ceasefire disruption is adding to investor apprehension. This is also adding to concerns that have been worrying investors for the past 5-6 weeks, with respect to global headwinds. Crude prices too have seen a sharp spike.’
6 reasons why the market is falling today
Let’s take a look at the key reasons behind the sharp fall –
Ceasefire disruption lead to investor apprehension
Global uncertainty has once again returned to the forefront. The ceasefire disruption and recent posts on social media by the US President have made investors cautious. Fresh concerns emerged after statements from Donald Trump indicating continued US military presence around Iran.
At the same time, reports of possible ceasefire violations and ongoing strikes in parts of the region have added to the tension.
Profitbooking after Wednesday’s strong rally
As a result of the growing apprehension, the street also saw a fresh bout of profitbooking.
Markets had surged more than 3% in the previous session after positive global cues linked to easing geopolitical tensions. This made many investors cautious and they wanted to book the profit from yesterday’s session, as per many experts.
Crude oil prices move higher
Another major factor to watch today has been the rise in crude oil prices. Brent crude climbed above $96 per barrel, raising concerns for oil-importing countries like India. This is over 3% jump after the biggest single day crash seen since 2020. Higher crude oil rates along with the fears of supply disruption weighed on investor sentiment.
Weak global market cues
The negative mood is not limited to India. Global markets also showed signs of weakness, which added to the pressure on domestic indices.
Across Asia, indices like Japan’s Nikkei, China’s Shanghai Composite, Hong Kong’s Hang Seng and South Korea’s KOSPI traded lower. This also added to investor sentiment.
Volatility indicator spikes 5%
Market volatility has also increased, as reflected in the India VIX, which rose more than 5% to around 20 levels. This is significant as the VIX had fallen over 20% in just the previous session on April 8. This also highlights investor apprehension.
The India VIX, often referred to as the fear gauge, indicates how much volatility investors expect in the near term.
Expiry-led volatility adds pressure
Adding to the day’s movement is the weekly derivatives expiry of the Sensex. Expiry days are known for higher volatility as traders either close or roll over their positions.
