Why is market falling today? Sensex tumbles 700 pts, Nifty slips below 22,600. 4 key triggers behind bear attack on D-St

The Indian stock market traded lower on Wednesday, with Sensex and Nifty falling nearly 1% each. Rising worries about further escalation in the Middle East conflict and surging oil prices spooked bulls trying to return to Dalal Street.

Sensex plunged more than 760 points to 72,836, while Nifty 50 lost over 190 points and fell below 22,556 in early Wednesday trading. The drop wiped nearly Rs 3 lakh crore from the total market capitalisation of all companies listed on BSE, pulling it below Rs 460 lakh crore.

Infosys, HCL Tech, Tech Mahindra and TCS shares dropped 2-4% to lead losses on Sensex. ITC, Asian Paints, Sun Pharma, ICICI Bank, Titan, Adani Ports, Bharti Airtel, Bajaj Finserv, UltraTech Cement, BEL, Eternal, Tata Steel, HUL and HDFC Bank shares fell 1-2% each to follow. Bucking the trend, L&T shares jumped 4% following its Q2 results

Broader markets, however, outperformed, with the Nifty Midcap 100 and Nifty Smallcap 250 indices falling up to 0.5%. Among the sectoral indices, Nifty IT plunged over 3% to lead losses, while Nifty FMCG and Nifty Oil & Gas fell more than 1% each.

India VIX, which measures market volatility, jumped over 4% to cross 17. The overall market breadth turned negative, with NSE seeing 1,740 declines and 1,023 advances, while 99 stocks remained unchanged.

Here are the key factors pushing the market down today:

1) Oil prices rise

Yemen’s Iran-aligned Houthis said they have struck Saudi Arabia’s largest oil refinery with a missile, escalating attacks against the world’s second-largest crude producer. Saudi authorities had not immediately confirmed the strike on the facility, which has a capacity of 550,000 barrels per day.As a result, Brent crude futures rose above $115 per barrel while WTI Crude futures rose above $101 per barrel. This came after oil prices dropped by nearly $2 on Tuesday after talks in the Middle East helped ease concerns over supply disruptions.

2) IT stocks plunge amid global AI optimism

India’s much-touted IT stocks, which are seen as the ‘anti-AI’ trade, plunged up to 4% and weighed on the overall market. This came as the overall global AI optimism rebounded, with South Korea’s Kospi rallying more than 6% after chip heavyweight SK Hynix reported a record-high operating profit of 83.3 trillion won ($62.8 billion) for the last quarter, up nearly sevenfold from a year earlier and beating market estimates.

SK Hynix and Samsung shares surged up to 9%. Japan’s Nikkei 225 rallied 1%. Semiconductor maker Kioxia Holdings jumped 10% ahead of its quarterly earnings report on Friday. Notably, India’s IT stocks had rallied recently when global AI stocks dropped as analysts began to sound the alarm over bubble-like circumstances amid the excessive optimism over artificial intelligence.

More to come…