The Indian benchmark indices fell sharply on Wednesday as the Sensex tumbled over 810 points to close at 74,764 and the Nifty fell over 200 points to close trade at 23,431 at 3:30 PM.
Previously, during the early morning session, the Sensex crashed more than 500 points and tested 75k, while the NSE Nifty50 slipped below 23,500, bleeding 137 points, as of 9:15 AM.
Brent crude is trading near USD 99.60 a barrel as the US-Iran conflict widens and Iran-backed Houthi attacks disrupt Saudi energy infrastructure.
For India, sustained crude prices around or above USD 100 a barrel could intensify inflationary pressures, weigh on the rupee and the current account, squeeze corporate margins and reduce 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,” said Ponmudi R, CEO of Enrich Money, an online trading and wealth-tech firm.
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 said.
Asian markets traded mixed on Wednesday. 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 were in negative territory on Tuesday.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 123.19 crore on Tuesday, according to exchange data.
Indian benchmark indices closed sharply lower on Tuesday amid the pressure from elevated crude prices and broader market concerns.
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.
