Stock Market Crash Today: The Indian stock markets plummeted sharply on Monday after a near one-way rally in the last week. The two benchmark indices, Sensex and Nifty, fell majorly due to global uncertainty, sharply rising crude oil prices, and caution ahead of a speech from the US Federal Reserve Chair Jerome Powell. BSE Sensex tumbled by 1,272 points to 1.49% to close at 84,299.78, while NSE Nifty lost 368 points or 1.4% to settle at 25,811.

The Bank Nifty index too was not spared and declined by 1.4% with all major banks declining, led by HDFC Bank, ICICI Bank, and Axis Bank. The volatility index, India VIX rose over 7%, signifying growing nervousness in the investor fraternity.

Sector-wise Analysis: Auto and Financial Stocks Under Strain; Metals Shine

Auto, financial services, and realty stocks were major losers in the sell-off that had swept across sectors. The Nifty Auto Index led losses, plunging 1.75% ahead of the September sales data. While the festival season was expected to bring about some positivity and strong demand, weak overall demand in some segments raised the risk factors.

Despite the overall selling, the metal space remained a silver lining, bolstered by the Chinese stimulus measures. The top gainers included stocks’ segment of JSW Steel, NTPC, Hindalco, and Tata Steel, which rallied with the hope carried forward by the increasing global metal price.

Top Nifty Gainrs

• JSW Steel
• NTPC
• Hindalco
• Tata Steel
• Britannia
• Top Nifty Losers
• Hero MotoCorp
• Trent
• Reliance Industries (RIL)
• Axis Bank
• Bharat Electronics

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The central factor behind the downfall of markets on Monday was the sharp decline in Japan’s Nikkei index, which slid 5% in its session. It was driven by speculation that the new government of Japan may standardize interest rates, a move likely to strengthen the yen and lead to the heavy sell-off in equities of the country.

This global situation spilled over to Indian markets, as well, and this was a part of the overall weakness in the market.

Crude Oil Prices: A Cause for Concern for India

Brent crude prices have been steadily on the rise and trading currently above $73 a barrel. The steady gain in crude prices may further worsen India’s current account deficit and cause worrying for import costs and economic stability.

If crude oil keeps soaring upwards, and breaks the $76-77 a barrel range, this will pose serious threats to Indian equities because the rise in energy costs hurts inflation and corporate margins.

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The Nifty Auto Index Witnessed pressure during the session as it fell by 1.75% ahead of September sales data due to be released tomorrow. According to market insights, the automobile sector is expected to witness double-digit year-on-year growth in two-wheeler sales during the festival season that has begun early, and since it boasts of an easy base, the muted demand seen in the PV segment is a cause for concern.

Meanwhile, tractor sales may increase almost by 10% with the support of a good monsoon and healthy retail demand.

Apprehension Before US Fed Head Jerome Powell’s Speech

Investor expectations for the speech of US Federal Reserve Chairman Jerome Powell also shaped markets. He is likely to pronounce a Fed view on interest rates. Investors watch out for any intimations of a policy shift related to changes in the US interest rates, though US monetary policy has significant direct implications for Indian markets and beyond.

The overall cautionary mood was made deeper by the anticipation over the speech by Powell and kept all market participants in suspense.

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Technical Analysis: Volatility Expected to Continue

Market experts have hinted that this volatility shall continue in the forthcoming sessions. Firstly, technical indicators were screaming caution as Geo Financial Services said attempts to take the indices higher could be at exhaustion points around 26,230-26,130 levels on the Nifty. Thus, investors are advised to tread cautiously and prepare for increased market swings as the week progresses.

Conclusion: What’s Next for Indian Equities?

The sharp fall of the market on Monday is a complex mix of global factors, ranging from interest-rate speculations in Japan to rising crude oil prices and reports about the US Federal Reserve announcements. Investors are probably going to stay short-term cautious once more clarity comes in all these sides. While the metal sector has shown its resilience, other sectors-the auto and financial services sector, in particular-are gaining sharp blows.

Elegant Newz will keep you updated as the market story unfolds.