Sensex crashes over 700 points, India VIX jumps 10%; 5 key factors driving the stock market down explained

The Indian stock market suffered significant intraday losses on Monday, 13 July, with the benchmarks, the Sensex and the Nifty 50, falling nearly 1% each amid weak global cues.The Sensex dropped over 700 points, or nearly 1%, to an intraday low of 76,857, while the Nifty 50 shed more than 200 points, or nearly 1%, to an intraday low of 24,000.However, the indices erased losses and ended flat, largely due to gains in the IT stocks. What drove the stock market down today?Experts highlight the following five factors behind the intraday crash in the stock market:1. Escalating US-Iran tensionsThe US and Iran have exchanged heavy missile and drone assaults over the last few days, with media reports claiming Tehran has again closed the Strait of Hormuz.The US Central Command (CENTCOM) on Saturday (local time) announced that it completed a third round of strikes this week against Iran, holding Iranian forces accountable for attacking another commercial ship in the Strait of Hormuz.Escalating tensions between the US and Iran have revived concerns about inflationary pressures, which could prompt aggressive monetary tightening by the US Federal Reserve and other major global central banks.2. Crude oil prices jumpCrude oil benchmark Brent crude jumped over 4% to trade above $79 per barrel on Monday due to the tensions between the US and Iran.A spike in oil prices has reignited concerns about its impact on India's fiscal math, as the country is the world's third-largest importer of crude oil and meets about 85–90% of its total crude oil requirement through imports."The back-and-forth in the West Asia crisis has become the new normal. From a market perspective, crude oil prices are a crucial factor. There is no panic in the oil market like in March. Brent is currently trading around $79. So long as Brent trades below $90, the market won’t be impacted significantly. But if Brent shoots up to above $90, there can be a significant correction in the market," VK Vijayakumar, Chief Investment Strategist, Geojit Investments, noted.3. India VIX jumps over 8%Volatility index India VIX surged over 8%, hinting at increased market nervousness amid escalating Middle East conflict.The volatility index fell to its five-month low of 11.05 on 7 July, when the US and Iran were engaged in technical talks, and markets were not pricing in any major volatility.However, developments in the Middle East over the past few days have shattered investors' expectations of a market recovery, triggering panic selling.4. Rise in the US dollar, bond yieldsThe dollar index rose by about 0.30%, while the 10-year bond yield climbed to 4.58%, as expectations of US Federal Reserve rate hikes gain momentum.Rate hikes may further boost the US dollar and bond yields, driving foreign capital away from emerging markets like India.At this juncture, FIIs appear to be reducing concentration risk in AI stocks and moving money to other markets, such as India. However, experts warn that if the Middle East conflict persists and oil prices remain elevated for a prolonged period, the Indian stock market may again see foreign capital outflows.5. Technical factorThe Nifty touched an intraday low of 24,000, which is a psychologically important level for the index.Shrikant Chouhan, the head of equity research at Kotak Securities, said a sustained move below 24,000 could trigger a retest of the 50-day SMA at 23,800, while a decisive breach of this support would increase the probability of an extended decline towards 23,600-23,500.As per Rajesh Palviya, Head of Research, Axis Direct, the immediate support for Nifty 50 is placed at 24,000, while a decisive break could lead to profit booking towards 23,800.Vipin Kumar, AVP-Research at Globe Capital Market, highlighted that the Nifty has been in a "broadening" formation since 15 June 2026, indicating further consolidation in the 23,800–24,600 spot zone.He added that a Doji-type weekly candlestick that overshadows the past three weeks' candles is also an indication of indecisiveness among traders, pointing toward further consolidation at the current juncture.As per Kumar, a break on either side of the 23,800–24,600 range will trigger the next short-term directional move.Stock market rebounds, closes flatThe Sensex erased all losses to end 47 points, or 0.06%, higher at 77,616.40. The NSE counterpart Nifty 50 closed the day with a minor gain of 4 points, or 0.02%, at 24,211.Infosys, TCS, HCL Tech, and Kotak Mahindra Bank provided the biggest support to the Sensex, whereas HDFC Bank, Reliance Industries, and Bharti Airtel exerted the greatest downward pressure on the index.Broader markets also mirrored the trend in the benchmarks, with the Nifty Midcap 100 and Smallcap 100 indices ending flat.Read all market-related news hereRead more stories by Nishant KumarDisclaimer: This article is for educational purposes only and does not constitute investment advice. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.