The Indian stock market is expected to open lower today, weighed down by rising global tensions and increasing crude oil prices. After a sharp drop in Friday’s session, market participants remain cautious as geopolitical developments in the Middle East continue to trigger volatility across global financial markets.
Why Indian Stock Market is Falling Today?
The major reason behind the current weakness in the Indian stock market is the growing conflict between Iran and Israel. Tensions in the Middle East have escalated, making investors worldwide nervous. This uncertainty is leading to risk-off sentiment, especially in emerging markets like India. The Economic Times reported that the Sensex fell over 700 points and Nifty dropped below 24,950, with IT stocks being the biggest drags.
Sensex, Nifty May See Flat to Negative Opening
The Sensex and Nifty are likely to open with a negative bias. On June 23, early indicators like the GIFT Nifty were trading below the 25,000 mark, signaling cautious sentiment among traders. The GIFT Nifty serves as a key pointer for the day’s market opening and its weakness reflects investor fear amid rising global uncertainty.
Crude Oil Prices Surge Over 3%, Inflation Fears Rise
Another key concern weighing on the Indian stock market is the sharp rise in crude oil prices. Brent crude rose over 3% in global markets due to supply fears stemming from the Iran-Israel conflict. For India, a country that imports over 80% of its oil, any spike in oil prices directly fuels inflation and widens the current account deficit, putting pressure on the rupee.
Higher crude oil prices may also force the Reserve Bank of India (RBI) to maintain a cautious stance on interest rates, dampening hopes for any rate cuts in the near term.
FPIs Turn Buyers, But DIIs Book Profits
Foreign Portfolio Investors (FPIs) have turned buyers in recent sessions, investing ₹3,243 crore on June 21. However, Domestic Institutional Investors (DIIs) booked profits worth ₹4,552 crore, showing that local players are becoming risk-averse. The Hindu Business Line noted this trend, highlighting the tug-of-war between foreign optimism and domestic caution.
Sector Watch: IT, Banks Under Pressure
IT stocks led the decline last week as global risk-off sentiment weighed on export-focused sectors. With the US Federal Reserve expected to stay hawkish and global demand likely to soften, Indian IT firms may face pressure on both revenue and margins.
Banking stocks also saw selling, with investors preferring safer assets. High inflation, potential RBI action, and market uncertainty are all contributing to a subdued outlook for the financial sector.
Global Geopolitical Impact on Indian Stock Market
The Indian stock market is not operating in isolation. The ongoing Iran-Israel conflict and broader geopolitical tensions are causing global investors to pull money from riskier assets. With the VIX (Volatility Index) spiking, the markets are expected to remain turbulent in the near term.
India’s economic fundamentals remain strong, but short-term headwinds are likely to keep indices range-bound or under pressure until there is clarity on the geopolitical front.
Conclusion
The Indian stock market is bracing for a challenging week, with global tensions, crude oil prices, and cautious investor sentiment leading the narrative. While long-term investors may find this a good opportunity to accumulate quality stocks, short-term traders should tread carefully. Keeping a close watch on geopolitical developments, crude oil trends, and FII/DII flows will be crucial in the coming days.
Stay Connected with Notifire latest and fastest updates.
