Indian stock markets witnessed a significant downturn in early trade as escalating geopolitical tensions in West Asia propelled crude oil prices towards the critical $100-per-barrel mark, raising concerns about inflation and economic stability.
Sensex and Nifty50 Performance: Key Market Highlights Today
- Indian benchmark indices Sensex and Nifty declined sharply in early trade due to escalating West Asia tensions and rising crude oil prices.
- Brent crude is trading near $99.60 a barrel, with experts warning that sustained prices above $100 could intensify inflation, weaken the rupee, and squeeze corporate margins in India.
- Selling pressure was observed in IT stocks, with HCL Tech, Tech Mahindra, Infosys, and TCS among the major laggards.
- Foreign Institutional Investors (FIIs) offloaded equities worth Rs 123.19 crore, contributing to the negative market sentiment.
- Geopolitical risks in the Middle East are expected to keep crude prices elevated and maintain high volatility across global financial markets.
Market benchmark indices Sensex and Nifty tumbled in early trade on Wednesday as escalating tensions in West Asia pushed crude oil to near $100-per-barrel mark. Selling in IT stocks and fresh foreign fund outflows also dented investors' sentiment.
The 30-share BSE Sensex tanked 500.25 points to 75,060.61 in early trade.
The 50-share NSE Nifty declined 129.40 points to 23,506.10.
Winners and Losers on Dalal Street
Among the 30 Sensex firms, HCL Tech, Tech Mahindra, Infosys, Tata Consultancy Services and Hindustan Unilever were the major laggards.
NTPC, Larsen & Toubro, Power Grid and Adani Ports were among the winners.
Impact of Rising Crude Oil Prices
"Brent crude is trading near $99.60-a-barrel after the US-Iran conflict widened and Iran-backed Houthi attacks disrupted Saudi energy infrastructure.
"For India, sustained crude prices around or above $100 could intensify inflationary pressures, weigh on the rupee and the current account, squeeze corporate margins and diminish expectations of monetary easing.
"As a result, elevated oil prices are likely to remain a key overhang on domestic market sentiment even if broader global cues improve," Radhakrishnan, Founder & CEO of HST Wealth, a research analyst firm, said.
Brent crude, the global oil benchmark, traded 1.44 per cent higher at $99.33 per barrel.
"Oil remains the principal macro driver. WTI crude is holding in the $94-95 per barrel range after the latest escalation in hostilities across the Middle East heightened fears of further disruptions to global energy supplies.
"With no clear signs of de-escalation, the geopolitical risk premium embedded in crude prices is expected to remain elevated, keeping volatility across global financial markets high," Ponmudi R, CEO of Enrich Money, an online trading and wealth-tech firm, said.
Global Market Trends and FII Activity
In Asian markets, South Korea's Kospi, Japan's Nikkei 225 index and Shanghai's SSE Composite index quoted higher, while Hong Kong's Hang Seng index traded lower.
US markets were in negative territory on Tuesday.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 123.19 crore on Tuesday, according to exchange data.
