Why Is Stock Market Falling Today? Sensex, Nifty Tumble Over 1%; Rs 4 Lakh Crore Wiped Out, 5 Key Factors Here

Indian stock market came under sharp selling pressure on Thursday with the Sensex falling more than 850 points and the Nifty slipping below 23,200 in afternoon trade. The sell-off came as rising US bond yields, renewed concerns over interest rates, higher crude oil prices and a weaker rupee combined to push investors into a cautious mode.

Sensex, Nifty Tumble; Rs 4 Lakh Crore Investor Wealth Wiped Out As Selling Spreads Across Dalal Street

The Bombay Stock Exchange (BSE) Sensex was down 865.86 points, or 1.16%, at 73,962.39, while the Nifty 50 fell 272.35 points, or 1.16%, to 23,174.45, at 12:34 pm on Thursday.

The Nifty opened at 23,221.80 and briefly moved up to an intraday high of 23,281.95 before selling intensified, dragging the index to a low of 23,173.05 against its previous close of 23,446.80. The decline was not restricted to the benchmark indices, with mid-cap and small-cap stocks also facing widespread selling pressure as investors turned increasingly cautious.

The sharp fall across equities resulted in more than Rs 4 lakh crore being wiped off the total market capitalisation of BSE-listed companies, pushing the overall market value below Rs 480 lakh crore

Why Stock Market Is Falling Today? Check Five Key Factors

1. US Bond Yields Hit Multi-Year High

The biggest global trigger is the sharp rise in US Treasury yields. The 10-year US Treasury yield climbed to around 5.106%, its highest level since 2007, after stronger US business activity data raised concerns that the economy may remain resilient enough for interest rates to stay high.

The two-year Treasury yield also crossed 4.9%. Higher US yields tend to put pressure on equity valuations and can make emerging-market assets relatively less attractive.

2. Fed Rate Hike Bets Return

The jump in US yields has also revived expectations of another Federal Reserve rate hike. Market expectations for an October hike have increased following stronger US economic data. That has added to concerns that global borrowing costs could remain elevated for longer than previously expected.

For Indian equities, the shift matters because US rates influence the dollar, bond yields and global investment flows. The combination is weighing on risk appetite across emerging markets.

3. Crude Oil Moves Back Above $102

Crude oil is adding another layer of pressure. Brent crude moved back above $102 a barrel, after briefly slipping below the $99 mark.

For India, higher oil prices are particularly important because they can increase the import bill and add to inflationary pressure. Expensive crude can also raise input and transportation costs for businesses. The latest move in oil prices has come amid continuing uncertainty around the Iran-US conflict and the Strait of Hormuz.

4. Rupee Weakness Adds Pressure

The rupee weakened by 14 paise to Rs 95.87 against the US dollar in early trade. The currency has been facing pressure from the combination of higher crude prices, elevated US yields and cautious foreign investor sentiment. A weaker rupee makes imports more expensive and can further complicate the inflation outlook.

While currency weakness can benefit some export-oriented companies, a sharp depreciation generally adds to concerns around imported inflation and broader market stability.

5. Iran-US Tensions Keep Risk Appetite Weak

Geopolitical tensions are adding to the uncertainty, particularly because of their potential impact on crude oil supplies. Developments involving Iran and the US, including the continuing uncertainty around the Strait of Hormuz, have kept oil markets on edge. Any prolonged disruption could keep crude prices elevated and increase inflation concerns for oil-importing economies such as India.

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