- On August 31, Sensex and Nifty declined, with Nifty opening gap-down at 24,118 and trading at 24,000, down nearly 0.7 per cent.
- Nifty futures slipped below support at 24,250, trading at 24,200, down about 0.6 per cent.
- Foreign institutional investors sold Indian equities worth Rs 5,039.80 crore on Friday, which can put pressure on Indian equities by reducing foreign capital flows.
- Asian markets traded lower, with South Korea's Kospi, Japan's Nikkei 225, Shanghai's SSE Composite and Hong Kong's Hang Seng in the red.
- Market participants raised the probability of a September US Federal Reserve rate hike, pushing US Treasury yields higher and triggering a broad dollar rally, following comments by Federal Reserve Chair Kevin Warsh.
- Global investor sentiment weakened after US forces struck two Iranian launchers, marking the first known American strikes on Iran since late July, leading to a rebound in crude oil prices.
- The advance/decline ratio stands at 7/43, indicating a bearish bias.
- All sectors are in the red, with Nifty Metal and Nifty Media down 2.4 per cent each, followed by Nifty Realty down 2 per cent, indicating a broad-based sell-off.
- The India VIX, a gauge of market volatility and investor fear, rose more than 5 percent to 11.26, indicating increased uncertainty and potential for greater swings in equity prices.
The Indian stock market faced significant pressure on Monday, with the Sensex down 300 points and Nifty below 24,050. This decline was driven by renewed tensions between the US and Iran, which led to a rebound in crude oil prices, pushing Brent crude up 2.33 percent to USD 90.19 per barrel.
Investor sentiment was further dampened by rising expectations of a September US Federal Reserve rate hike, following comments from Fed Chair Kevin Warsh that suggested the need for action if inflation remains high. This has resulted in a broad dollar rally and increased US Treasury yields.
Ponmudi R, CEO of Enrich Money, noted, “This week’s trading begins with the market facing a few headwinds.” The rupee also fell 13 paise to 95.56 per US dollar, reflecting the impact of rising crude prices and geopolitical tensions.
Foreign institutional investors sold Indian equities worth Rs 5,039.80 crore on Friday, adding to the bearish sentiment. The advance/decline ratio stood at 7/43, indicating a broad-based sell-off across sectors, with Nifty Metal and Nifty Media down 2.4 percent each.378
The India VIX, a measure of market volatility, rose over 5 percent to 11.26, signaling increased uncertainty. Analysts suggest that if Nifty futures breach the 24,000 mark, further declines could follow, potentially dragging the index down to 23,800.1
Overall, the market is currently dominated by bearish trends, with traders advised to consider short positions as the likelihood of further declines outweighs potential rallies.
“Brent crude rose 2.33 percent to USD 90.19 per barrel after US strikes on Iranian launchers, while the rupee fell 13 paise to 95.56 per dollar. Foreign institutional investors sold Rs 5,039.80 crore of Indian equities on Friday, and the India VIX jumped over 5 percent to 11.26.”
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