Punjab Newsline | Business
After two consecutive sessions of gains, the Indian stock market witnessed a sharp decline on March 27. The downturn began early in the day, with the Sensex opening in the red at 74,883.79, while the Nifty also started on a weak note.
As trading progressed, selling pressure intensified across sectors. The Sensex plunged nearly 1,200 points, slipping close to the 74,000 level. Meanwhile, the Nifty dropped by 361 points, falling below the crucial 23,000 mark.
These Key Reasons Behind the Market Decline
Profit Booking After Recent Rally
The market had surged nearly 3.5% over the previous two sessions (March 24 and 25). Experts believe investors used the opportunity to book profits, especially those who had invested at higher levels earlier.
Crude Oil Prices Remain Elevated
Although crude prices eased slightly on Friday, they are still hovering above the $100 mark. Brent crude fell 0.8% to $107.11 per barrel, while WTI declined 0.88% to $93.65. High oil prices continue to worry investors due to their impact on inflation and the economy.
Rising Geopolitical Tensions
Uncertainty remains high after U.S. President Donald Trump extended the waiver on sanctions against Iran’s energy sector until April 6. However, tensions persist as Iran has not indicated any willingness to ease its stance, adding to market nervousness.
Weak Global Market Cues
Global markets also contributed to the negative sentiment. On March 26, U.S. markets declined by around 2%, while the 10-year U.S. Treasury yield crossed 4.4%. Wall Street indices hit their lowest levels since September, and Asian markets followed suit.
Rupee Hits Record Low
The Indian Rupee weakened further, slipping below 94 against the U.S. Dollar to hit an all-time low of 94.29. Since late February, the currency has depreciated by nearly 4%, largely due to concerns over prolonged geopolitical tensions and rising oil prices.
Continued Selling by Foreign Investors
Foreign Institutional Investors (FIIs) remained net sellers despite the recent rally. Their continued selling has added pressure on the market and limited any recovery.
Spike in Market Volatility (India VIX)
The India VIX, which measures market volatility, surged by 7.5% to 26.53. The rise in VIX indicates increased uncertainty and suggests that volatility may remain high in the near term.