Stock Market Crash: The first day of the week turned out to be very bad for the local stock market. Investors got a big shock as soon as the market opened on Monday, September 28. The Sensex had broken over 850 points in the opening minutes. The biggest reason for this is believed to be the increase in crude oil prices at the international level. In fact, due to the ongoing tension between America and Iran, the price of crude oil has crossed 106 dollars per barrel.

Effect of crude oil fire

Crude oil prices are continuously increasing in the global market. Brent futures rose 2.1 percent to $106.49 a barrel. Its prices have increased by 18 percent so far this month. At the same time, US crude futures also rose 1.5 percent to $93.84 a barrel. This boiling of crude oil directly affected the Indian stock market sentiment. Gift Nifty was at 23,111 points on Monday morning, which makes it clear that the market is going to start very slowly. As soon as trading started at 9:15, the situation deteriorated rapidly. Sensex fell 512 points to 73,383.70 in just two minutes at 9:17. The downward trend did not stop here, but by 9:40 the Sensex had broken 870 points.

Tensions are rising between the US and Iran

Global tension is the main reason behind this destruction in the market. Peace talks between the US and Iran are currently at a complete standstill. US President Donald Trump has rejected Iran’s proposal to reopen the Strait of Hormuz. Trump said that Iran is only eager for compromise. Iran’s clear stance is that the dispute can only be resolved through diplomacy. The situation in the Middle East worsened when the US and Israel launched a joint attack on Iran in late February. This war has thrown the oil market into complete uncertainty.

Continued sales by foreign investors

Foreign investors (FIIs) also play a major role in weakening the market. Foreign institutional investors are steadily withdrawing their money from the Indian market. According to the information, on Friday foreign investors invested Rs. 36.94 billion ($385.54 million) worth of shares were sold. So far this month they have withdrawn $1.8 billion. If we talk about the whole year, this figure has reached to 25.86 billion dollars. Due to this heavy sell-off, the Nifty 50 and BSE Sensex fell for seven consecutive sessions, one of their longest declines on record.

Friday’s momentum reversed

This huge drop on Monday completely washed away Friday’s recovery. There was some relief in the market on Friday last week. Subsequently, the Sensex rose 315.20 points to close at 73,895.74 on buying in banking, auto and gas shares. The Nifty also surged by 77.40 points on that day. Stocks like Axis Bank, Mahindra, Asian Paints, Bajaj Finance registered a good jump on Friday. Among these, Axis Bank increased the most by 2.82 percent. But all this progress was lost as soon as the market opened on Monday. Investor confidence has been shaken, leading to further market volatility.