Indian stock markets, including the Sensex and Nifty, witnessed a notable slump as escalating West Asia tensions drove crude oil prices sharply higher, alongside foreign fund outflows and a weakening rupee, impacting investor sentiment.
Key Points
- Indian benchmark indices, Sensex and Nifty, fell significantly due to a sharp rise in crude oil prices driven by renewed West Asia tensions.
- The 30-share BSE Sensex dropped 561.46 points (0.72%) to 77,054.94, while the 50-share NSE Nifty declined 158.95 points (0.66%) to 24,052.05.
- Brent crude, the global oil benchmark, surged 4.26% to $86.85 per barrel, intensifying fears of delayed corporate earnings recovery in India.
- The rupee breaching the 96-per-dollar mark and wholesale price inflation rising to 9.87% in June further compounded market pressure.
- Foreign Institutional Investors (FIIs) offloaded equities worth Rs 3,062.27 crore, indicating a negative sentiment among overseas investors.
Stock market benchmark indices Sensex and Nifty tumbled on Tuesday as a sharp surge in crude oil prices due to the renewed flare-up in West Asia dented investors' sentiment.
Fresh foreign fund outflows and the falling rupee also put pressure on the markets.
Market Performance Overview
After three days of gains, the 30-share BSE Sensex tanked 561.46 points, or 0.72 per cent, to settle at 77,054.94. During the day, it tumbled 614.92 points, or 0.79 per cent, to 77,001.48.
The 50-share NSE Nifty dropped 158.95 points, or 0.66 per cent, to end at 24,052.05.
From the Sensex pack, HCL Tech declined the most by 4.42 per cent. Bajaj Finserv, InterGlobe Aviation, State Bank of India, Mahindra & Mahindra, and Larsen & Toubro were also among the major laggards.
Bharti Airtel, Tata Consultancy Services, Sun Pharma, Tata Steel, Adani Ports and Eternal were the winners.
Impact of Global Factors
Brent crude, the global oil benchmark, surged 4.26 per cent to $86.85 per barrel.
"Domestic equities came under renewed pressure as escalating West Asia tensions drove crude oil prices sharply higher, reviving fears that global energy supply will further delay a recovery in India's corporate earnings," Vinod Nair, Head of Research, Geojit Investments Ltd, said.
The pain was compounded by the rupee breaching the 96-per-dollar mark, fanning concerns over imported inflation, he added.
Meanwhile, wholesale price inflation shot up to 9.87 per cent in June, from 9.68 per cent in May, led by a sharp spike in prices of food and non-food items.
Global Market Trends and FII Activity
In Asian markets, South Korea's Kospi, Japan's Nikkei 225 and Shanghai's SSE Composite index rebounded and ended in positive territory. Hong Kong's Hang Seng index also settled higher.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 3,062.27 crore on Monday, according to exchange data.
