Market Performance
The Indian stock market experienced a sharp selloff on Friday, June 13, with the Sensex and Nifty plunging by over 1.6% and 1.7%, respectively. The sudden drop came amid escalating geopolitical tensions in the Middle East.
- Sensex opened at 80,427.81, down from the previous close of 81,691.98
- It fell over 1,300 points, hitting an intraday low of 80,354.59
- Nifty 50 started at 24,473, down from 24,888.20, and hit a low of 24,473
- Around 10 AM, the Sensex was down 907 points to 80,785, and Nifty dropped 269 points to 24,619
- BSE Midcap and Smallcap indices fell up to 1.5%
The market capitalization of BSE-listed companies declined by nearly ₹7 lakh Crore, shrinking from ₹449.6 lahks Crore to ₹442.5 lahks Crore in a single day.
Main News
The steep fall in Sensex and Nifty was triggered by five key global and domestic developments, with Middle East tensions topping the list.
1. Israeli Strikes on Iran Shake Global Sentiment
Israel launched attacks on multiple Iranian facilities, including key nuclear sites like Natanz. The strikes were aimed at crippling Iran's nuclear program and reportedly targeted scientists involved in enrichment.
The offensive, confirmed by Israeli PM Netanyahu, is expected to continue "for as many days as necessary." This escalation has alarmed global investors, particularly in the wake of the existing Russia-Ukraine conflict.
2. Crude Oil Prices Surge Over 10%
Brent and WTI crude oil prices surged by more than 10% following the Israeli offensive, sparking concerns about potential supply disruptions.
India, a major crude importer, is vulnerable to rising oil prices due to:
- Increased fiscal pressure
- Potential inflationary risks
3. Investors Flee to Safe-Haven Assets
As risk appetite declined, investors turned to safer options:
- Gold prices in India surged 2%
- The US dollar rose 0.30%
- US bond prices climbed, pushing yields lower
This shift in strategy highlights the market's defensive stance amid global instability.
4. Rupee Weakens Past 86 Mark
The Indian rupee opened at 86.25 per dollar, a sharp fall from the previous close of 85.52. This marked a 73-paise drop, putting additional pressure on equity markets.
A weaker rupee poses risks such as:
- Higher import costs
- Possible foreign capital outflows
- Elevated inflationary pressure
5. Tariff-Related Uncertainty Persists
Adding to market worries is the uncertainty around US tariff policies. Despite an announcement of a partial agreement between the US and China, the lack of a comprehensive trade deal has left markets disappointed.
Summary of the Article
The Indian stock market, represented by Sensex and Nifty, witnessed a dramatic crash on June 13 due to:
- Geopolitical tensions between Israel and Iran
- A 10% surge in crude oil prices
- Flight to safety by global investors
- A weaker rupee breaching the 86/$ mark
- Ongoing concerns over US tariff policies
With investors spooked and ₹7 lakh Crore wiped out in market value, Friday's trading session underlined how interconnected geopolitical events can ripple through financial markets.
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