Indian stock markets saw a sharp fall in early trading on Monday as global markets weakened and crude oil prices surged due to rising tensions in the Middle East. Both benchmark indices, Sensex and Nifty, dropped close to 3 per cent, while all sectoral indices traded in the red
Sensex and Nifty tumble nearly 3 percent amid oil surge. Representational Image
Sensex plunged 2,345.89 points or 2.97 per cent to 76,573.01, while the Nifty 50 dropped 708.75 points or 2.89 per cent to 23,741.70 in early trade on Monday.
All 30 Sensex stocks were trading lower, with Inter-Globe Aviation down nearly 8 per cent. Other major laggards included Tata Steel, Maruti, State Bank of India, Asian Paints, ICICI Bank, and Eternal. The market opened under heavy pressure, with the Nifty 50 starting at 23,868.05, down 582.40 points (-2.38 percent), and the Sensex at 77,056.75, down 1,862.15 points (-2.36 percent).
Global crude surge adds to worries
Crude oil prices jumped sharply amid tensions in West Asia. Brent crude rose 23.63 per cent to USD 114.59 per barrel, and further surged to USD 116 per barrel on Monday.
"Brent crude has spiked above USD115 delivering a big oil shock to economies and markets. Big oil importers like India will be hit hard if the West Asian conflict lingers long and crude price remains high," VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said as per PTI reports.
Sectoral impact of the sell-off and foreign funding
Heavy selling was observed across most sectors on the NSE with PSU Banks falling 4 per cent, Nifty Auto 2.9 per cent, Nifty Media down 2.36 per cent, Nifty IT loosing 1.29 per cent, Nifty FMCG 1.38 percent and consumer durables declined 2 percent.
Analysts also warned that sectors dependent on oil, such as aviation, paints, autos, tyres, chemicals, and other industries using oil derivatives, may face continued pressure due to rising fuel and input costs.
Data from Friday showed Foreign Institutional Investors (FIIs) sold equities worth Rs 6,030.38 crore, while Domestic Institutional Investors (DIIs) bought stocks worth Rs 6,971.51 crore, providing partial support to markets.
Global markets under pressure
Markets across Asia and the US also suffered sharp declines, adding to domestic selling pressure:
Japan’s Nikkei 225 down 6.5–7 percent,
South Korea KOSPI dropped 7.43 percent,
Shanghai SSE Composite down 1 to 2 percent
Hong Kong Hang Seng fell 2.46 percent
Taiwan Weighted Index declined 5.77 percent
Singapore Straits Times lost 2.65 percent
US markets ended last week lower with S&P 500 that fell 1.33 percent and Nasdaq down 1.53 percent.
Analysts’ view and market outlook
Sunil Gurjar, SEBI-registered analyst predicted that if that the markets could recover if it goes above 24,646, saying: "The Nifty breached key support levels with heavy FII selling, a weakening rupee, and global tensions hitting sentiment. A sustained breakout above 24,646 could bring bullish momentum, while breakdowns below 23,850 may trigger further falls," as reported by IANS
Ajay Bagga, Banking and Market Expert, added:
"Higher crude prices will increase domestic fuel costs, impact GDP, widen the current account deficit, and hit sectors from aviation to consumer goods. Retail petrol and diesel prices are likely to rise," as reported by IANS
(With PTI and IANS Inputs)
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