Sensex falls 650 pts from day’s high, Nifty below 23,400: Key reasons behind markets turning red

Fresh updates from the financial markets indicate that Key market indices The two key benchmark indices significantly declined from day's high to trade in red on September 15 due to various reasons, including elevated crude prices and global bond yields.

At 9:58 am, the Sensex was down 23.42 points or 0.03% at 74,758.34, and the Nifty was down 21.95 points or 0.09% at 23,376.15. Around 1,438 shares advanced, 2,118 shares declined, and 211 shares were unchanged.

Key reasons behind markets turning red

1) Elevated crude prices

Crude prices stay elevated on concerns that the Middle East conflict could spread further and threaten global energy supplies.

Yemen's Iran-aligned Houthis rolled out a new wave of attacks on Saudi Arabia and were digging into positions on the western coast of Yemen along the Red Sea, Yemeni officials stated. Gulf Arab states additionally postponed scheduled talks with Iran, amplifying concerns the conflict could widen.

Brent crude prices were trading near $107 in Asian trading. Elevated oil price marks are a negative for India, the world's third-largest oil importer.

Accelerating inflationary pressures triggered by rising crude prices have additionally boosted bets of a US interest-rate gain later the current week.

In the meantime, India's retail inflation accelerated further in August as price pressures spread beyond food and transport, strengthening the case for a interest-rate gain by the central bank next month.

2) Elevated global bond yields

Benchmark 10-year Treasury yields hit the key psychological level of 5% on Monday for the first time since October 2023, a milestone that market watchers say could ripple through the US economy. 3) Technical reason

Market watchers stated Nifty has to cross 23,600-mark for bullish momentum to return to the markets.

"Going ahead, resilience above 23,500 will signal pullback towards 23,650 marks over the upcoming sessions. Failure to do so will signal some consolidation in the range of 23,230-23,500.

"Immediate bias in the index stays down and a follow-through softness below last week low 23,231 will open downside towards the short-term backing placed around the June low of 23,070 marks in coming week. Only a formation of elevated high and elevated low on a sustained basis in the daily chart will signal a pause in the current down trend.

"Any pullback attempt will face immediate resistance at Wednesday's gap down area of 23,650. While stiff resistance is placed around 23,800-24,000 marks being the recent breakdown area and 20 days EMA," stated Pabitro Mukherjee, Deputy Vice President-Research, Bajaj Broking.