Stock markets fell for the third day running on Monday with the benchmark Sensex tumbling 1,313 points amid rising crude oil prices after the US and Iran failed to reach a peace deal to end the war in West Asia.
The 30-share BSE Sensex tanked 1,312.91 points, or 1.70 per cent, to settle at 76,015.28. During the day, it tumbled 1,370.79 points or 1.77 per cent to 75,957.40. The 50-share NSE Nifty dropped 360.30 points or 1.49 per cent to end at 23,815.85. In three sessions since Thursday, Nifty dropped over 2 per cent or 515 points, while Sensex has fallen by nearly 1,950 points or 2.5 per cent.
US President Donald Trump dismissed Iran's response to the latest peace proposal as “totally unacceptable”, dampening hopes of an immediate diplomatic breakthrough, an expert said. Also, Prime Minister Narendra Modi’s appeal for austerity measures amplified investor concerns around forex reserves, fuel costs and consumption outlook, analysts said.
Titan, a leading jewellery and fashion accessories company, was the biggest loser among Sensex companies, dropping by nearly 7 per cent. InterGlobe Aviation, State Bank of India, Bharti Airtel, Eternal and Reliance Industries were among the major laggards. Sun Pharma, Hindustan Unilever, Adani Ports, Kotak Mahindra Bank, Axis Bank and ICICI Bank were the winners.
Brent crude, the global oil benchmark, traded 2.23 per cent higher at USD 103.5 per barrel. The Indian equity markets witnessed a sharp sell-off session with benchmark indices correcting more than 1.4 per cent amid rising geopolitical concerns and heightened fears over inflationary pressures. Rising uncertainty surrounding crude oil prices and fears of further geopolitical escalation triggered aggressive unwinding of positions, dragging indices lower into the close.
The immediate trigger came after Prime Minister Narendra Modi’s speech on May 10, which the market interpreted as a sign of mounting macroeconomic stress, he said.
While global uncertainty surrounding the US-Iran conflict and surging crude oil prices had already weakened sentiment, the Prime Minister’s appeal for austerity measures amplified investor concerns around India’s forex reserves, fuel costs, and consumption outlook.
Emphasising that the Centre is trying to shield people from the adverse impact of the conflict in West Asia, Prime Minister Narendra Modi on Sunday called for judicious use of fuel, postponement of gold purchases and foreign travel, among other measures, to strengthen the economy.
Addressing a rally organised by the Telangana BJP in Hyderabad, he suggested that reducing petrol and diesel consumption, using metro rail services in cities, carpooling, increased use of electric vehicles (EVs), utilising railway services for parcel movement and working from home to conserve foreign exchange amid the crisis in West Asia.
Stressing the need to conserve foreign exchange amid the crisis, Modi called for postponing gold purchases and foreign travel for one year. “We have to save foreign exchange by any means,” he said, adding that due to the West Asia conflict, prices of petrol and fertilisers had increased significantly.
Jewellery stocks faced heavy selling pressure, with Sky Gold and Senco Gold falling over 12 per cent intra-day before closing lower by over 6 per cent. Senco Gold closed 7.8 per cent lower after falling 10 per cent in the day trade.
Brent crude emerged as the key market trigger, surging 4 per cent to around USD 105.7 per barrel, intensifying concerns around imported inflation and India’s external balances. The BSE MidCap Select index tanked 1.09 per cent and BSE SmallCap Select index declined 0.44 per cent.
Sectorally, Consumer Durables index tumbled 3.76 per cent, Realty (2.74 per cent), MidSmall Private Banks Quality Tilt (2.60 per cent), BSE PSU Bank (2.28 per cent), Consumer Discretionary (2.14 per cent) and Power (2.13 per cent). BSE Healthcare and Hospitals were the winners. A total of 2,892 stocks declined, while 1,457 advanced and 189 remained unchanged on the BSE.
Also read: Sensex crashes 1,100 pts, Nifty down 300 pts in early trade
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