Stock market benchmark indices Sensex and Nifty nosedived over 1 per cent on Monday as investors’ sentiment were hit hard following a sharp spike in crude oil prices amid escalating tensions in West Asia. Weak trends in global markets and heavy foreign fund outflows also dented sentiments.
The 30-share BSE Sensex tanked 2743.46 points, or 3.37 per cent, to 78543.73 in early trade. It later ended at 80238.85, down 1048.34 points or 1.29 per cent. The 50-share NSE Nifty tumbled 575.15 points, or 2.28 per cent, to 24603.50 in intra-day trade. The benchmark later settled 312.95 points, or 1.24 per cent, down at 24865.70.
Rupee tumbles
The rupee saw a steep loss of 41 paise to settle at 91.49 against the US dollar on Monday.
“Triggered by spiking oil prices in the wake of the Iran crisis, the Indian rupee saw its sharpest one-day drop since late January. The currency remains under pressure as investors move toward safe-haven assets, foreign capital outflow from the equities, and fears grow that expensive imports will hurt the trade balance,” said Dilip Parmar, senior research analyst, HDFC Securities.
Jateen Trivedi, VP research analyst-commodity and currency, LKP Securities, said: “Higher oil prices widen India’s import bill and current account concerns, leading to defensive positioning in the rupee. The positive momentum seen post-budget and after the US-India trade understanding has temporarily faded under global risk-off sentiment.”
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.82 per cent higher at 98.41.
Defence stocks surge
Defence stocks closed higher on Monday. Shares of Ideaforge Technology jumped 7.66 per cent, Paras Defence and Space Technologies surged 5.95 per cent, Bharat Electronics climbed 2.09 per cent, Astra Microwave Products advanced 1.62 per cent, Taneja Aerospace & Aviation shot up by 1.34 per cent, Hindustan Aeronautics went up by 0.96 per cent and Bharat Dynamics (0.22 per cent) on the BSE.
Airline, tourism scrips
Shares of airline companies, tour and travel-related service providers tumbled on Monday.
The stock of InterGlobe Aviation ended 6.25 per cent lower after falling 7.50 per cent during intraday trade on the BSE. Shares of SpiceJet also dropped 5.72 per cent and in intraday trade, it had declined 9.20 per cent. Shares of Yatra Online tumbled 9.59 per cent, Easy Trip Planners slumped 7.08 per cent, TBO TEK dived 4.04 per cent, Thomas Cook dropped 3.57 per cent and Le Travenues Technology dipped 2.08 per cent.
On Monday, foreign institutional investors offloaded equities worth ₹3,295.64 crore. The India VIX has edged higher, signalling increased uncertainty and risk aversion among market participants.
Global markets
In Asian markets, Japan’s Nikkei 225 fell over 1 per cent and Hong Kong’s Hang Seng index tumbled more than 2 per cent, while Shanghai’s SSE Composite index ended in positive territory.
European stocks clocked their biggest one-day decline in three months on Monday.
The pan-European STOXX 600 closed down 1.7 per cent, at its lowest level in more than two weeks.
US stocks, meanwhile, were swinging between sharp losses and a tiny gain on Monday. The S&P 500 fell as much as 1.2 per cent at the start of trading. But the index quickly erased the loss, in part because past military conflicts have not led to sustained drops for markets, and it was back to virtually unchanged in midday trading. The Dow Jones was down 75 points, or 0.2 per cent, and the Nasdaq was 0.3 per cent higher.
Crude price spike
Oil prices rose sharply Monday as disruptions to tanker traffic through the Strait of Hormuz chokepoint raised uncertainty about how US and Israeli attacks on Iran would affect supply to the world economy. US oil traded 7.6 per cent higher at $72.12 per barrel, while international standard Brent was up 8.6 per cent at $79.11 per barrel.
Precious metals
Precious metal prices jumped 4 per cent in futures trade on Monday, with silver surging to ₹2.93 lakh per kilogram and gold climbing to near ₹1.68 lakh per 10 grams, tracking strong demand in the international markets.
