Stock market crash: India VIX, the fear gauge index, spiked nearly 9 per cent to go past 20, indicating elevated uncertainty among traders and investors

Benchmark indices Sensex and Nifty fell on Wednesday after a day’s breather amid the ongoing tensions in West Asia and sustained foreign fund outflows. The BSE Sensex opened on a flat note at 78,238.91 and went on to make a high of 78,324.37 in early morning deals. The index, however, drifted lower as the session progressed and cracked more than 900 points, or 1.1 per cent, to trade at 72,292 around 11:45 AM. 

 

Similarly, the Nifty index opened at 24,231.65 and hit a high of 24,299 before paring the gains to trade at 24,013, down 247 points or 1.02 per cent. The 50-share pack briefly slipped below 24,000 to make a low of 23,986.

 

Among the sectoral indices, Nifty Auto was the top loser as it dropped nearly 2 per cent, followed by Nifty Bank, which was down 1.5 per cent, with 13 out of 14 constituents trading in the red.

 

The broader market was mixed as the Nifty Midcap 100 slipped 0.25 per cent while the Smallcap 100 edged up 0.53 per cent. 

 

India VIX, the fear gauge index, spiked nearly 9 per cent to go past 20, indicating elevated uncertainty among traders and investors.

 

Here’s why markets are falling today:

 

US-Iran war triggers caution:Despite the US President Donald Trump signalling that the war in the Middle East, investors continued to take a cautious stance amid uncertainty and volatile global crude oil prices. 

 

Ponmudi R, chief executive officer at Enrich Money, said while recent indications of easing tensions in the Middle East have provided some temporary relief to global markets, sentiment remains fragile as uncertainty surrounding the region persists.

 

Volatile crude oil prices: Oil prices declined by more than $10 per barrel on Tuesday after hitting almost a four-year high in the previous session. Last checked, the global oil benchmark Brent Crude was trading at $84.37 per barrel. 

According to Ponmudi, crude oil price volatility remains a key macro variable for India, given its heavy dependence on energy imports. 

“Any sharp fluctuation in oil prices has the potential to influence inflation expectations, currency stability, and broader investor sentiment,” he added. 

Persistent FPI selling: On Tuesday, foreign portfolio investors (FPIs) were net sellers of Indian equities amid continuous uncertainty. The FPIs pulled out ₹4,672 crore worth of Indian equities. However, domestic institutional investors (DIIs) stayed net buyers, with buying worth ₹6,333 crore.

So far this month, FPIs have sold shares worth ₹32,849 crore, while DIIs have remained net buyers, investing ₹48,133.98 crore in equities.

Selling in blue-chip stocks:Market breadth was negative, as only 15 stocks advanced and 35 declined from the frontline Nifty 50 index. The top laggards included heavyweights like Axis Bank, M&M, and Bajaj Finance, down more than 3 per cent each, followed by HDFC Bank, Bajaj Auto, and Bajaj Finserv. Jio Financial Services, Sun Pharma, Coal India, and ONGC were among the gainers.

According to Ponmudi, the near-term outlook for Indian equities remains sensitive to global cues, particularly crude oil price movements, geopolitical developments, and trends in foreign institutional investor flows. Until clearer global triggers emerge, markets are likely to remain range-bound with intermittent bouts of volatility.

From the technical perspective, Rupak De, senior technical analyst at LKP Securities, said the Nifty staged a decent recovery yesterday and ended the day with gains after a volatile session. However, the index approached a resistance zone, and the 24,300–24,350 range could act as an area where sellers may look to re-enter the market.

“Overall, the sell-on-rise scenario is likely to persist. On the downside, immediate support is placed at 24,150; a break below this level could trigger renewed selling pressure. If the index slips below 24,150, it may decline further towards 23,800,” he said.

Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not sharechart. We advise investors to consult with certified experts before making any investment decisions.