Stock market crashes: Sensex tumbles over 1,000 points, Nifty50 trades below 23,000

Stock market crashes

Dalal Street began the week on a negative note, with BSE Sensex declining 700 points and NSE Nifty50 opening below the 23,000 mark. The sharp fall came as investors assessed rising crude oil prices, geopolitical cues and continued foreign selling.BSE Sensex fell 696.56 points, or 0.94%, to 73,199.18, while Nifty 50 declined to 22,915.90, down 224.05 points or 0.97%, in early trade on Monday.GIFT Nifty futures were trading at 23,100, down 88.5 points or 0.38%, signalling a muted opening for the Nifty 50. The cautious tone comes after the benchmark indices recorded seven consecutive sessions of losses, falling nearly 6%. Sensex and Nifty50 had already ended the previous week on a negative note, falling 399.22 points and 205.9 points, respectively.Crude oil remained another key concern for investors. Brent crude futures rose 1.5% to around $106 a barrel, while Asian markets declined 0.2%.Oil prices have remained volatile since late February, when the US and Israel launched joint strikes on Iran, triggering a war in the Middle East. The Strait of Hormuz continues to see disruption for the seventh month straight The latest rise in crude came amid a stalemate in US-Iran peace talks.

US President Donald Trump said he had rejected an Iranian proposal to reopen the Strait of Hormuz and end the fighting. Iran, meanwhile, said on Sunday that diplomacy was the only way to resolve its conflict with the United States and Israel.The movement in crude prices remains particularly important for India, the world’s third-largest crude importer. A sustained rise in oil prices can raise the country’s import bill, fuel inflation and put pressure on corporate margins.Foreign investor selling has also continued to weigh on domestic equities. Provisional data showed foreign investors were net sellers of Indian shares worth 36.94 billion rupees ($385.54 million) on Friday.Their selling in September has so far reached $1.8 billion, taking their total selling for the year to $25.86 billion."Globally, developments around US-Iran diplomacy and crude oil prices will remain critical.

Any progress on a framework for reopening the Strait of Hormuz could ease energy prices and provide some relief to India's import bill and the rupee, while renewed geopolitical tensions could keep volatility elevated," Ajit Mishra, SVP – Research, Religare Broking, said.On the domestic front, Mishra said industrial production data for August and the HSBC manufacturing PMI reading would be released during the week.

Market participants will also closely monitor foreign institutional investor (FII) activity and the upcoming monthly auto sales figures.Global bond yields are also expected to remain in focus following the Federal Reserve’s September policy decision."Global bond yields will also remain important following the Federal Reserve's September policy decision. Further increases in yields and the dollar could weigh on emerging-market capital flows, while a moderation in yields could provide some relief.

The rupee will remain another important factor to watch, with persistent oil-related demand for dollars and continued FII outflows potentially keeping the currency under pressure, although RBI intervention has helped contain excessive volatility," Ponmudi R, CEO - Enrich Money told PTI.Ponmudi added that a series of economic data releases from the US would also be important for global risk sentiment. On the global front, US consumer confidence, JOLTS job openings and the eurozone’s September inflation cluster will be watched for signals on expectations around the global rate cycle.