Contents
Sensex falls 700 pts from day’s high, Nifty near 23,750: Key reasons behind market decline
Sensex fell 300 points from day’s high, Nifty below 23,900
US-Iran peace deal uncertainty impacted market sentiment
Foreign investors sold shares worth Rs 1,040 crore on Wednesday
Benchmarks Sensex and Nifty fell from day’s high on May 29 due to various reasons, including US-Iran peace deal uncertainty.
At 1:16 pm, the Sensex was down 359.43 points or 0.47% at 75,508.37, and the Nifty was down 145.75 points or 0.61% at 23,761.40. About 1,655 shares advanced, 2,157 shares declined, and 170 shares were unchanged. Sensex fell 700 points from day’s high while Nifty was trading neare 23,750-mark.
The intraday high of Sensex was 76,220.02 while that of Nifty was 24,002.8.
Key reasons behind market decline
US-Iran peace deal uncertainty
Markets were trading lower on May 29 amid uncertainty over US-Iran peace deal.
The US and Iran reached an agreement on Thursday to extend their ceasefire and lift restrictions on shipping through the Strait of Hormuz, sources told Reuters, though US President Donald Trump is yet to approve it, and Iranian state media said it had not been finalised.
Brent crude futures dropped to $93 per barrel, while Asian markets jumped 2% on optimism over the U.S.-Iran deal and AI rally.
For the week, the Nifty and Sensex are up 0.9% and 0.8%, respectively.
“Markets are pausing as investors weigh the prospects for peace in the Middle East and the potential ripple effects for oil,” said Hiren Dasani, chief investment officer for emerging markets at WhiteOak Capital.
“If crude settles around $85-$90 over the next nine months, the impact on corporate earnings should remain manageable and markets need confirmation of that for any sustained upmove from here,” Dasani said.
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2. FII selling
Foreign investors sold shares worth Rs 1,040 crore ($108.70 million) on Wednesday, as per provisional data. They have offloaded $24.3 billion of shares so far this year, already surpassing 2025’s record annual outflows.
“Brent crude declining to below $93 is a big positive. This has happened on expectations of a deal between US and Iran. Therefore, if a deal happens crude can decline further, thereby improving India’s macros which have been under pressure from the energy crisis. This will also help stabilise the rupee, which, in turn, can restrain the FPI outflows,” said VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.
3. Technical reason
Analysts said Nifty has to decisively trade above 24,000 for markets to trade higher.
“Initial trading range is expected to be 23,840-24,000, with low prospects of a vertical move on either side, even if range breakout unfolds. Larger range is seen as 23,500-24,450,” said Anand James, Chief Market Strategist, Geojit Investments Limited.
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4Â IMD says India may see weaker monsoon
Even as heatwaves continue to scorch large parts of the country, the India Meteorological Department (IMD) on Friday downgraded the forecast for southwest monsoon from 92% to 90% of the long-period average, signaling a higher risk of below-normal rainfall over India this June to September.
This comes as monsoon’s arrival is itself delayed compared to IMD’s initial forecast of May 26. Normally, it reaches Kerala coast by June 1, with a standard deviation of +/- seven days. However, meteorologists expected it to arrive earlier this year. The is occurring at a time when the sea-surface temperatures in the equatorial Pacific Ocean are gradually evolving from neutral ENSO-conditions to El-Nino, which is detrimental for monsoon rains.x
5 India VIX rises
India VIX, the volatility gauge, rose 4% to 15.56, which indicates sellers are more active.