Sensex opens 600 points lower, Nifty tops 24,000; IndiGo down 3%
The BSE Sensex fell 626.40 points, or 0.81%, to 76,942.99, while the NSE Nifty50 declined 184 points, or 0.76%, to 24,022.90 as of 9:25 am.
Benchmark indices opened sharply lower on Monday as renewed fighting in the Middle East and Iran's move to shut the Strait of Hormuz pushed crude oil prices higher, raising concerns over inflation and India's import bill.
The BSE Sensex fell 626.40 points, or 0.81%, to 76,942.99, while the NSE Nifty50 declined 184 points, or 0.76%, to 24,022.90 in early trade. The indices had opened lower at 76,963.35 and 24,039.40, respectively, before extending losses.
Selling was broad-based across Dalal Street. All 16 sectoral indices traded in the red, while the Nifty 100, Nifty 200 and Nifty 500 slipped around 0.7%. Midcap and smallcap stocks also came under pressure, although they outperformed the benchmark indices. India VIX, the market's fear gauge, jumped over 10%, reflecting a rise in investor nervousness.
CRUDE OIL SURGE HITS SENTIMENT
Investor sentiment weakened after U.S. and Iranian forces exchanged heavy missile and drone attacks over the weekend. Tehran said it had again closed the Strait of Hormuz, a key global oil shipping route, raising fears of supply disruptions.
The geopolitical escalation pushed oil prices sharply higher. Brent crude climbed more than 4% to $79.12 a barrel, while WTI crude rose over 4% to $74.33.
Higher crude prices are a key concern for India, which imports most of its oil needs. A sustained rise in crude can increase the country's import bill, fuel inflation and put pressure on corporate earnings.
BANKS, METALS LEAD LOSSES
Financial stocks remained under pressure, with the Nifty Financial Services index falling over 1%, while the Nifty Metal index also declined more than 1%.
Among Sensex stocks, Tata Steel dropped 2.38%, followed by Indigo (2.07%), Bajaj Finance (1.38%), BEL (1.33%), UltraTech Cement (1.30%), Larsen & Toubro (1.19%) and Titan (1.13%). HDFC Bank, Maruti Suzuki and Bajaj Finserv also traded over 1% lower.
IT stocks, however, showed resilience after the strong start to the earnings season. TCS gained 1.25%, HCLTech rose 0.89%, NTPC added 0.81%, while Tech Mahindra was marginally higher.
WHAT EXPERTS SAY
Dr VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said the biggest trigger for Indian markets remains crude oil.
"The back and forth movement in the West Asia crisis has become the new normal. The attempt by Iran to weaponise geography has negative implications for energy importers like India. And, President Trump's totally inconsistent stand vis-a-vis Iran has rendered stability a thing of the past. We don't know how this crisis will pan out."
He said investors should closely monitor crude prices.
"From the market perspective, particularly for India, price of crude is the crucial factor. There is no panic in the oil market like in March. Brent is currently trading around $79. So long as Brent trades below $90, the market won't be impacted significantly. But if Brent shoots up above $90, there can be a significant correction in the market."
Vijayakumar, however, pointed out that foreign institutional investor (FII) inflows continue to provide support to Indian equities.
"A positive factor that is imparting resilience to the market now is the FII inflows. During the last eight trading days, FIIs were buyers in five days. The weakness in the chip trade in South Korea is turning out to be positive for India. FIIs are reducing the concentration risk in chip stocks and moving money to stabler markets like India. If this trend sustains, the Indian market will continue to remain resilient."
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)
Benchmark indices opened sharply lower on Monday as renewed fighting in the Middle East and Iran's move to shut the Strait of Hormuz pushed crude oil prices higher, raising concerns over inflation and India's import bill.
The BSE Sensex fell 626.40 points, or 0.81%, to 76,942.99, while the NSE Nifty50 declined 184 points, or 0.76%, to 24,022.90 in early trade. The indices had opened lower at 76,963.35 and 24,039.40, respectively, before extending losses.
Selling was broad-based across Dalal Street. All 16 sectoral indices traded in the red, while the Nifty 100, Nifty 200 and Nifty 500 slipped around 0.7%. Midcap and smallcap stocks also came under pressure, although they outperformed the benchmark indices. India VIX, the market's fear gauge, jumped over 10%, reflecting a rise in investor nervousness.
CRUDE OIL SURGE HITS SENTIMENT
Investor sentiment weakened after U.S. and Iranian forces exchanged heavy missile and drone attacks over the weekend. Tehran said it had again closed the Strait of Hormuz, a key global oil shipping route, raising fears of supply disruptions.
The geopolitical escalation pushed oil prices sharply higher. Brent crude climbed more than 4% to $79.12 a barrel, while WTI crude rose over 4% to $74.33.
Higher crude prices are a key concern for India, which imports most of its oil needs. A sustained rise in crude can increase the country's import bill, fuel inflation and put pressure on corporate earnings.
BANKS, METALS LEAD LOSSES
Financial stocks remained under pressure, with the Nifty Financial Services index falling over 1%, while the Nifty Metal index also declined more than 1%.
Among Sensex stocks, Tata Steel dropped 2.38%, followed by Indigo (2.07%), Bajaj Finance (1.38%), BEL (1.33%), UltraTech Cement (1.30%), Larsen & Toubro (1.19%) and Titan (1.13%). HDFC Bank, Maruti Suzuki and Bajaj Finserv also traded over 1% lower.
IT stocks, however, showed resilience after the strong start to the earnings season. TCS gained 1.25%, HCLTech rose 0.89%, NTPC added 0.81%, while Tech Mahindra was marginally higher.
WHAT EXPERTS SAY
Dr VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said the biggest trigger for Indian markets remains crude oil.
"The back and forth movement in the West Asia crisis has become the new normal. The attempt by Iran to weaponise geography has negative implications for energy importers like India. And, President Trump's totally inconsistent stand vis-a-vis Iran has rendered stability a thing of the past. We don't know how this crisis will pan out."
He said investors should closely monitor crude prices.
"From the market perspective, particularly for India, price of crude is the crucial factor. There is no panic in the oil market like in March. Brent is currently trading around $79. So long as Brent trades below $90, the market won't be impacted significantly. But if Brent shoots up above $90, there can be a significant correction in the market."
Vijayakumar, however, pointed out that foreign institutional investor (FII) inflows continue to provide support to Indian equities.
"A positive factor that is imparting resilience to the market now is the FII inflows. During the last eight trading days, FIIs were buyers in five days. The weakness in the chip trade in South Korea is turning out to be positive for India. FIIs are reducing the concentration risk in chip stocks and moving money to stabler markets like India. If this trend sustains, the Indian market will continue to remain resilient."
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)
