Bombay Stock Exchange building, Mumbai, Wikimedia Commons, CC BY 2.0
Sensex sheds 382 points as crude oil, US-Iran tensions weigh
Sensex closed 382.62 points lower at 76,132.81 and Nifty settled at 23,779.15 on Monday, as rising crude oil prices and US-Iran tensions weighed on investor sentiment.
The Sensex shed 382.62 points on Monday to close at 76,132.81, as crude oil prices and US-Iran tensions weighed on investor sentiment.
The Nifty settled at 23,779.15, down 118.55 points, retreating from Friday’s close of 23,897.70.
The Sensex had also closed higher on Friday, at 76,515.43, making Monday’s fall a clear reversal of the prior session’s gains.
Rising expectations of a US interest-rate hike, after stronger-than-expected American jobs data, added further pressure on the market.
The Strait of Hormuz, through which roughly a fifth of global oil supply is shipped, remains a key chokepoint, so any rise in tensions near it tends to feed straight through into oil prices and oil-importing markets like India.
The Nifty had struggled to sustain above the 24,000 mark in recent sessions, facing technical resistance near 24,025 even before Monday’s decline.
Both benchmark indices had closed higher in the previous session on Friday, with the Sensex at 76,515.43 and the Nifty at 23,897.70, before Monday’s reversal.
Bank Nifty and other rate-sensitive indices also traded weak through the session, tracking the broader risk-off mood among investors.
Market participants said they would watch upcoming US Federal Reserve commentary and further developments in the Gulf region for cues on near-term direction.
Brent crude approached $97 a barrel during the session, its highest level in months, as the escalating US-Iran standoff around the Strait of Hormuz raised fears of supply disruption from the Gulf.
IT stocks were the worst-hit sector, since higher US interest rates weigh on Indian technology firms that generate a large share of their revenue from American clients.
Oil-sensitive sectors including aviation, paints, tyres and logistics also came under pressure as elevated crude prices raise input and fuel costs for these industries.
Foreign institutional investors were net sellers in Indian equities during the session, adding to the downward pressure alongside the global cues.
Bombay Stock Exchange building, Mumbai, Wikimedia Commons, CC BY 2.0