Indian Markets Extend Losses as Crude Oil Breaches $100 Amid US-Iran Standoff
Mumbai : Indian stock markets witnessed a significant downturn for the second day, with the Sensex plummeting over 850 points, as crude oil prices surged past $100 per barrel amidst escalating US-Iran geopolitical tensions and persistent foreign fund outflows.
Indian stock markets, including the Sensex and Nifty, recorded significant losses for the second consecutive day.
Crude oil prices, with Brent crude trading at $103.8 per barrel, breached the $100 mark, driven by geopolitical tensions in West Asia and stalled US-Iran negotiations.
The market decline was exacerbated by sustained foreign institutional investor (FII) outflows and a weak trend observed in other Asian and European equities.
Analysts attribute the market's shift from resilience to risk aversion to intensifying global uncertainties and the dual pressure of rising inflation expectations and stress on corporate margins for import-dependent economies like India. Major laggards in the Sensex pack included Trent, Bajaj Finserv, Tech Mahindra, Mahindra & Mahindra, Infosys, and HDFC Bank.
Stock markets fell for the second consecutive day on Thursday, with the benchmark Sensex tumbling 852.49 points, as crude oil prices once again breached the $100 per barrel mark amid stalled US-Iran negotiations.
Sustained foreign fund outflows, along with a weak trend in Asian and European equities, also unnerved investors.
Market Performance Overview : The 30-share BSE Sensex tumbled 852.49 points, or 1.09 per cent, to settle at 77,664. During the day, it slumped 942.31 points, or 1.20 per cent, to 77,574.18.
The 50-share NSE Nifty dropped 205.05 points, or 0.84 per cent, to end at 24,173.05.
Gainers and Losers on Dalal Street : From the Sensex pack, Trent, Bajaj Finserv, Tech Mahindra, Mahindra & Mahindra, Infosys and HDFC Bank were among the major laggards.
In contrast, Adani Ports, Larsen & Toubro, Sun Pharma, Bharti Airtel and Bharat Electronics were the winners.
Crude Oil Surge and Geopolitical Impact : Brent crude, the global oil benchmark, traded 1.89 per cent higher at $103.8 per barrel.
"Indian markets extended their losing streak, with the Nifty witnessing back-to-back bearish sessions and correcting over 400 points across the last two trading days. The price action reflects a clear shift in market tone - from resilience to risk aversion -as global uncertainties intensify and domestic triggers fail to provide immediate support," Hariprasad K, Research Analyst and founder, Livelong Wealth, said.
The primary driver of today's decline remains the sharp escalation in geopolitical tensions in West Asia, he noted.
"Concerns surrounding disruptions in the Strait of Hormuz have significantly dented investor confidence, introducing a fresh layer of uncertainty into global markets.
"This has directly translated into a spike in crude oil prices.
"For an import-dependent economy like India, this creates a dual pressure, rising inflation expectations and stress on corporate margins," Hariprasad said.
Global Cues and FII Outflows : Foreign Institutional Investors (FIIs) offloaded equities worth Rs 2,078.36 crore on Wednesday, according to exchange data.
In Asian markets, South Korea's benchmark Kospi ended higher, while Japan's Nikkei 225 index, Shanghai's SSE Composite index and Hong Kong's Hang Seng index settled lower.
"Domestic equities witnessed a broad-based decline, as elevated crude prices above $100 per barrel, amid the impasse in US-Iran negotiations, continued to weigh on sentiment.
"The risk-off mood was further intensified by weak global cues, persistent FII outflows, and a depreciating rupee alongside higher US Treasury yields," Vinod Nair, Head of Research, Geojit Investments Limited, said.
