Indian stock markets face a sharp decline as Sensex and Nifty crash due to soaring crude oil prices, bearish global cues, and persistent foreign fund outflows, raising concerns about economic stability.
Key Points
- Sensex and Nifty plummet nearly 3% due to surging crude oil prices and negative global market sentiment.
- Foreign fund outflows exacerbate the stock market decline, creating investor jitters.
- Brent crude oil prices spike, delivering a significant oil shock to import-dependent economies like India.
- Asian markets experience widespread losses, mirroring the downturn in US markets.
- Analysts warn of continued market volatility if West Asian conflict persists and oil prices remain elevated.
Stock market benchmark indices Sensex and Nifty tumbled nearly 3 per cent in early trade on Monday as boiling crude oil prices and bearish trend in global equities weighed heavily on investors' sentiment.
Besides, relentless foreign fund outflows also made investors jittery.
The 30-share BSE Sensex crashed 2,345.89 points or 2.97 per cent to 76,573.01 in early trade. The 50-share NSE Nifty tumbled 708.75 points or 2.89 per cent to 23,741.70.
All the 30-Sensex firms were trading lower.
InterGlobe Aviation traded nearly 8 per cent lower. Tata Steel, Maruti, State Bank of India, Eternal, Asian Paints and ICICI Bank were also among the major laggards.
Brent crude, the global oil benchmark, jumped 23.63 per cent to USD 114.59 per barrel.
Impact of Rising Oil Prices
"Brent crude has spiked above $115 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.
Global Market Performance
In Asian markets, South Korea's Kospi tumbled over 7 per cent and Japan's Nikkei 225 dropped 6.5 per cent. Shanghai's SSE Composite index and Hong Kong's Hang Seng index were also quoting lower.
The US market ended lower on Friday.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 6,030.38 crore on Friday, according to exchange data. Domestic Institutional Investors (DIIs) bought stocks worth Rs 6,971.51 crore in the previous trade.
On Friday, the Sensex tumbled 1,097 points or 1.37 per cent to settle at 78,918.90. The Nifty dropped 315.45 points or 1.27 per cent to end at 24,450.45.
Last week, the BSE benchmark tanked 2,368.29 points or 2.91 per cent, and the Nifty declined 728.2 points or 2.89 per cent.
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