Mumbai: Stock market benchmark indices Sensex and Nifty slumped in early trade on Wednesday, September 2, tracking a bearish trend in global equities and higher oil prices due to escalating conflict in West Asia.
The 30-share BSE Sensex tanked 788.52 points to 76,155.76 in early trade. The 50-share NSE Nifty slumped 269 points to 23,786.80.
Among the 30 Sensex firms, InterGlobe Aviation, Eternal, Mahindra & Mahindra, UltraTech Cement, Bajaj Finserv and Bajaj Finance were the major laggards.
Adani Ports and Sun Pharma were the winners.
Brent crude, the global oil benchmark, traded 0.76 per cent higher at USD 95.37 per barrel.
“Indian markets are likely to remain under pressure as surging crude oil prices and rising global bond yields continue to weigh on investor sentiment amid the escalating conflict in the Middle East. While India’s resilient domestic growth outlook provides an underlying cushion, external macroeconomic and geopolitical risks are expected to dominate near-term market direction, keeping the broader outlook cautious,” Ponmudi R, CEO of Enrich Money, an online trading and wealth-tech firm, said.
Crude oil has emerged as the key near-term risk for domestic equities, he said adding that WTI crude has surged more than 8 per cent over the past two sessions following renewed US-Iran military tensions, reigniting concerns over potential disruptions to energy supplies from the region.
“The escalation of the US-Iran conflict and the consequent 5 per cent spurt in Brent crude overnight to USD 96 is a sentiment negative,” V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said.
In Asian markets, South Korea’s Kospi tumbled over 3 per cent, Japan’s Nikkei 225 index dropped nearly 3 per cent. Shanghai’s SSE Composite index and Hong Kong’s Hang Seng index also traded lower.
US markets ended lower on Tuesday.
“Wall Street closed lower on Tuesday, with the S&P 500 falling 0.7 per cent, the Dow Jones Industrial Average declining 0.8 per cent and the Nasdaq losing 1 per cent, as rising energy prices and bond yields intensified concerns tighter monetary conditions ahead. The US 10-year Treasury yield climbed to around 4.79 per cent, close to a 20-month high.
“Asian markets have followed Wall Street lower this morning as investors reassess the impact of higher energy costs alongside the broader global bond sell-off,” Hariselvan Radhakrishnan, Founder & CEO of HST Wealth, a Research Analyst firm, said.
Foreign Institutional Investors (FIIs) bought equities worth Rs 1,143.38 crore on Tuesday, according to exchange data.
On Tuesday, the Sensex ended flat, down 12.99 points, or 0.02 per cent, at 76,944.28. The Nifty slipped 24.60 points, or 0.10 per cent, to end at 24,055.80 on the weekly expiry day.
