Sensex, Nifty fall nearly 1%: 3 reasons why stock market is down today

Dalal Street came under selling pressure on Friday as the escalation in the Middle East conflict pushed crude oil prices higher, making investors cautious and pulling away from the markets.

Global markets turned risk-off and India's booming IPO market continued to divert money away from the secondary market. The sell-off was broad-based, with investors also worried that higher oil prices and rising bond yields could keep inflation elevated and make monetary policy tighter globally.

At 10:35 am, the BSE Sensex was down 553.50 points, or 0.74%, at 74,349.09. The index had opened at 74,309.16. The Nifty 50 declined 192.50 points, or 0.82%, to 23,285.30 after opening at 23,270.30.

The biggest concern for Indian equities is the sharp rise in crude oil prices. Brent crude was trading at $107.40 a barrel, while WTI crude stood at $102.12.

The escalation in the Middle East has raised concerns about disruptions to global oil supplies and shipping routes. Iran-aligned Houthis seized control of Yemen's port city of Mocha and advanced along the Red Sea coast, while tanker attacks have intensified around the Strait of Hormuz.

For India, which is heavily dependent on imported crude, sustained oil prices above $100 can increase the import bill, add to inflationary pressures and weigh on economic growth and corporate earnings.

"Headwinds for the market are getting stronger with the escalation in the Middle East conflict. Brent crude has shot up to around $108. If this high price sustains, or worse, spikes further, the impact on India’s GDP growth and consequently on corporate earnings will not be insignificant," said Dr V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.

The impact was visible across energy-sensitive sectors. Nifty Realty was the worst-performing sectoral index, falling 4.02%, while Metal declined 2.29%, Financial Services Ex-Bank fell 1.26% and Consumer Durables dropped 1.21%.GLOBAL MARKETS FALL, BOND YIELDS RISE

The sell-off is not limited to India. Global equities have come under pressure as higher oil prices have fuelled concerns over inflation and interest rates.

Asian markets fell sharply, while rising global bond yields added to the risk-off mood. The US 10-year Treasury yield has climbed to 4.96%, approaching the closely watched 5% level.

Higher yields increase concerns that central banks could keep monetary policy tighter for longer. According to Reuters, federal funds futures were indicating a more than 70% probability of a US rate hike next week.

Vijayakumar said the rise in US bond yields was an "equally strong headwind" for markets, adding that the 10-year yield approaching 5% could be an inflection point for global equities.

The pressure was visible across Indian sectors, with Nifty Auto down 1.03%, Financial Services 25/50 down 1.16%, PSU Bank down 1.06%, Private Bank down 0.56%, Chemicals down 1.10% and Healthcare down 0.59%.

India VIX, the market's volatility gauge, rose 4.47% to 12.32, signalling heightened nervousness among investors.BOOMING IPO MARKET SQUEEZES LIQUIDITY

Another factor weighing on the secondary market is the strong activity in India's primary market.

Heavy oversubscription and attractive listing gains have drawn large amounts of investor money towards IPOs. This means funds that could otherwise flow into listed shares are being deployed in new issues.

Vijayakumar said the "booming Indian IPO market is the centre of attraction of investors now", with heavy oversubscription and attractive listing gains drawing millions of investors into the IPO market. He said this has "sucked off big money from the secondary market".

The upcoming NSE IPO is also adding to the excitement. The issue is scheduled to open for public subscription on September 17.

The diversion of liquidity comes at a time when foreign investors are already cautious amid geopolitical risks, higher crude prices and rising global yields, adding to pressure on the secondary market.advertisementBROAD-BASED SELL-OFFThe selling was visible across the broader market as well. The Nifty 100 fell 0.87%, Nifty 200 declined 0.92% and Nifty 500 dropped 0.91%.

The Nifty Midcap 50 fell 1.01%, Midcap 100 declined 1.08% and Smallcap 100 dropped 0.93%.

Among Sensex stocks, Bajaj Finance was the biggest loser, falling 1.91%, followed by Tata Steel, which declined 1.88%, Cement at 1.80%, M&M at 1.72% and IndiGo at 1.71%. L&T fell 1.52%, Reliance declined 1.40%, HDFC Bank dropped 1.30% and Asian Paints fell 1.31%.

IT stocks, however, bucked the broader trend. Tech Mahindra gained 1.90%, HCLTech rose 1.33% and Infosys advanced 0.69%. The Nifty IT index was up 0.17%.

"All things considered, investors have to be cautious in this challenging environment," Vijayakumar said.

With crude above $107, the US 10-year yield nearing 5% and global markets under pressure, the direction of Indian equities will depend heavily on how the Middle East conflict develops, whether oil prices remain elevated and how global central banks respond to renewed inflation risks.

(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)- EndsPublished By: Published On: Sep 11, 2026 11:07 IST