Why is stock market falling today? Rs 79,000-crore wiped out as Sensex slides over 500 pts. 5 factors behind the decline

Benchmark indices Nifty and Sensex witnessed a sharp selloff on Monday, with the Sensex falling for a second straight session and the Nifty declining for the fifth consecutive session. The decline wiped out nearly Rs 79,000 crore from the market capitalisation of BSE-listed companies.

At the day’s low, the 30-share Sensex fell 540 points to 77,469, while the Nifty declined 140 points to 24,228. On the Sensex, Infosys, HCL Tech, TCS, Tech Mahindra, State Bank of India and Hindustan Unilever were among the major laggards.

Here are key factors behind the selloff


1.) Crude oil prices gain - Oil prices gained 1% in early Asian trade on Monday as tanker traffic through the Strait of Hormuz slowed over the weekend, with no peace deal in sight between the United States and Iran to end the conflict in the Middle East.

Brent crude futures rose 60 cents, or 0.7%, to $89, while U.S. West Texas Intermediate crude futures slipped 40 cents to $83 a barrel. Both benchmarks gained more than 5% last week after attacks on tankers operated by Abu Dhabi National Oil Company in the Strait of Hormuz and an attack on a Saudi Aramco refinery.

Over the weekend, Iranian Foreign Minister Abbas Araqchi said Iran had not decided to resume talks with the U.S. Meanwhile, U.S. President Donald Trump called on Americans to accept slightly higher gasoline prices while the conflict continues.

2.) IT stocks bleed-Infosys, HCL Tech, TCS and Tech Mahindra were among the biggest laggards, falling up to 3%. The selloff comes ahead of the minutes of the Fed’s July meeting, due on Wednesday, in which investors will parse for clues on the US central bank’s monetary policy trajectory.

While the Fed is widely expected to hold rates steady, any hawkish commentary on the path of future rate cuts could weigh on technology stocks. Higher interest rates can also pressure Indian IT companies by prompting clients in key markets such as the US and Europe to curb discretionary technology spending and delay large cloud, digital transformation and other projects, hurting deal activity and revenue growth.

3.) Iran war tensions - Iran’s military doctrine is shifting from a defensive posture towards a more offensive one, with its armed forces preparing to adopt “transformative approaches” and take necessary action at the appropriate time, Iranian Fars News Agency reported.

IRGC Political Deputy Brigadier General Yadollah Javani told Iranian state media that Iran’s actions so far had been defensive but could take on an offensive character in the future.

Over the weekend, Iranian Foreign Minister Abbas Araqchi said Tehran had not decided to resume talks with the US. Meanwhile, US President Donald Trump urged Americans to accept slightly higher gasoline prices as the conflict continues.

Shipping through the Strait of Hormuz also slowed over the weekend following tanker attacks. Kpler shiptracking data showed five commodity vessels passed through the strait on Saturday, while none were recorded on Sunday, compared with 31 vessels during the previous weekend.


4.) Mixed global cues - The S&P 500 slipped 0.2% on Friday to close at 7,785.76, retreating from a record-setting session but still posting its third consecutive weekly gain. The Nasdaq Composite fell 0.3% to 26,729.16, while the Dow Jones Industrial Average declined 107.58 points, or 0.2%, to end at 53,732.41.

US stock futures were mixed early Monday after the S&P 500 notched its third straight weekly gain despite ending Friday lower. Dow futures fell 59 points, or 0.11%, while S&P 500 and Nasdaq 100 futures rose 0.1% and 0.35%, respectively.

Asian markets also opened mixed. Japan’s Nikkei 225 was flat, while Australia’s S&P/ASX 200 fell 0.23%. Hong Kong’s Hang Seng Index advanced 1.4%, while mainland China’s CSI 300 edged 0.13% higher. South Korean markets remained closed for a holiday.


5.) Weakness in rupee - The rupee slipped to 95.49 per dollar in early trading, but losses were contained by dollar sales from state-run banks, which traders said were most likely on behalf of the RBI, Reuters reported. The central bank has intervened frequently in the forex market over the past week, with traders saying the moves are aimed at anchoring expectations around the currency.

The Reserve Bank of India likely intervened in the foreign exchange market on Monday as uncertainty over the Middle East conflict kept oil prices elevated and weighed on market sentiment, four traders told Reuters.

On the technical front, the Rs 95.5–95.45 zone is expected to provide immediate support. A break below this range could pull USD/INR towards the Rs 95.3–95.4 consolidation zone. The pair continues to trade above all major EMAs, while the MACD is nearing a bullish crossover and the RSI is around 51, indicating improving upward momentum. The near-term bias remains tilted higher for USD/INR, with a sustained move above Rs 95.6 signalling renewed weakness in the rupee amid firm dollar demand and potentially limited effectiveness of domestic intervention.