The Indian stock market experienced a significant downturn today, June 23, 2025, with the Sensex plummeting approximately 900 points and the Nifty falling below the 24,850 mark. This decline reflects a cautious sentiment among investors, primarily driven by escalating geopolitical tensions in the Middle East and concerns regarding global technology spending.
One of the primary catalysts for the market's fall is the renewed uncertainty in the Middle East. The U.S. military's recent airstrikes on Iranian nuclear facilities have heightened tensions between the U.S., Israel, and Iran. These actions have led to a spike in crude oil prices, which reached a five-month high, adding further pressure on the Indian economy, which heavily relies on oil imports. There are also reports that Iran is considering closing the Strait of Hormuz, a vital global energy chokepoint, which could further exacerbate the energy crisis and negatively impact market sentiment.
The technology sector is also contributing to the market's decline. Concerns about sustained softness in global tech spending have intensified after Accenture reported its third consecutive year-over-year drop in outsourcing contracts. Nifty IT has particularly suffered, sliding by more than 1%, reflecting worries about the future performance of IT companies.
Foreign portfolio investors (FPIs) have also turned cautious. After investing ₹19,860 crore in May, they exhibited a net outflow of ₹4,192 crore in June, indicating a shift in sentiment and a move towards a more risk-averse approach. Experts believe that FPI activity is closely linked to geopolitical developments, and the escalating tensions are prompting them to reduce their exposure to the Indian market.
Despite the current downturn, some analysts suggest that the downside may be limited due to India's strong domestic fundamentals and the Reserve Bank of India's (RBI) proactive measures to support growth. The RBI's recent decisions, including a surprise cut in the Cash Reserve Ratio (CRR) and a shift in policy stance, are seen as positive steps to ensure liquidity and support economic expansion. Furthermore, the India VIX, a measure of market volatility, has fallen by 4% to 13.67, suggesting a potential easing of fear and a possible near-term consolidation before a recovery.
Technical analysts suggest key support levels for the Nifty 50 index lie between 24,900 and 25,000, with resistance expected around 25,200 to 25,300. They advise traders to watch price action near these support zones for potential buying opportunities. Derivatives data indicates strong put writing and a rising Put-Call Ratio (PCR), hinting at a potential consolidation phase before the market attempts to recover.
In conclusion, the Indian stock market's sharp decline today is primarily attributed to geopolitical tensions in the Middle East, concerns about global tech spending, and cautious FPI activity. However, strong domestic fundamentals and proactive measures by the RBI may limit further downside. Market participants are advised to closely monitor global cues and key technical levels for potential trading opportunities amid the expected volatility.
