The Indian stock market continued witnessing selling pressure for the third consecutive session on Wednesday, 9 September, tracking weak global cues. The Sensex dropped more than 650 points, or nearly 1%, to drop to an intraday low of 74,923, while the NSE barometer Nifty 50 also dropped nearly 1% to the day's low of 23,467 during the session. In these three sessions, the Sensex and the Nifty 50 have declined by 2% each.
Here are three key factors behind the fall in the domestic stock market:
Crude oil prices have been on an uptrend, weighing on market sentiment. Brent crude trades near $100 per barrel, fuelling concerns over a potential inflation flare-up, monetary tightening, and distortion in India's growth-inflation dynamics.
India is the world's third-largest oil-importing country. So, higher oil prices can inflate the country's dollar-denominated import bill and can put pressure on the trade balance and the rupee. The rupee opened 5 paise lower at 94.87 against the US dollar on Wednesday.
Escalating US-Iran tensions are keeping investors on tenterhooks. According to Reuters, US forces struck multiple Iranian oil tankers linked to Iran’s Revolutionary Guard Corps (IRGC) in response to further attempted missile attacks on a US Navy warship.