Mumbai, Sep 09: Market benchmark indices Sensex and Nifty tumbled in early trade on Wednesday as escalating tensions in West Asia pushed crude oil to near USD 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.
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.
“Brent crude is trading near USD 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 USD 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 USD 99.33 per barrel.
“Oil remains the principal macro driver. WTI crude is holding in the USD 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.
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 in negative territory on Tuesday.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 123.19 crore on Tuesday, according to exchange data.
On Tuesday, the Sensex dropped 555.23 points, or 0.73 per cent, to settle at 75,577.58. The Nifty declined 144.05 points, or 0.61 per cent, to end at 23,635.10.
