2 weeks ago
Indian Stocks Under Pressure as Oil and Global Yields Rise
Indian stock markets had another difficult day, with both major indexes falling.
The Nifty 50 has now fallen for six trading sessions in a row.
Investors are worried because oil prices are rising and could make inflation worse in India.
They are also concerned about the US-Iran conflict and possible problems moving oil through the Strait of Hormuz.
Stock markets in Asia, especially South Korea, also dropped sharply.
Technology companies such as Samsung and SK Hynix were among the biggest losers.
Higher global bond yields added to investors' concerns.
Gold rose a little as people waited for clues about future US interest rates.
Sensex fell 493 points to 77,235.46, while Nifty 50 dropped 133 points to 24,154.90 on Tuesday.
GIFT Nifty traded near 24,187, indicating a weaker opening for Indian equities.
Asian markets declined, with South Korea's Kospi plunging 5.89% and technology shares falling sharply.
Brent crude rose to $91.28 and WTI to $85.31 as uncertainty over the US-Iran conflict raised supply concerns.
Gold recovered modestly to $4,342.33 per ounce as investors monitored Treasury yields and Federal Reserve meeting minutes.
- Who
- Indian investors, global markets, the United States, Iran, and companies including Samsung Electronics and SK Hynix.
- What
- Indian benchmark stocks fell as higher crude prices, global bond yields, weak Asian markets, and US-Iran uncertainty pressured sentiment.
- Where
- Indian markets, Asian exchanges, Wall Street, and the Middle East, including the Strait of Hormuz.
- When
- On Tuesday, August 18, with overnight market cues reported for Wednesday trading.
- Why
- Rising oil prices, unresolved conflict between the United States and Iran, weaker global technology shares, and a bond-market sell-off increased investor concerns.
Iran's Position
US Position
Ceasefire and military posture
Iran's Position
Iran was reported to be shifting toward a "fully offensive" military stance after negotiations stalled.
US Position
The United States ruled out extending the temporary ceasefire, while Donald Trump said no negotiations were underway.
Strait of Hormuz
Iran's Position
Tehran said the strategically important shipping route remained closed and discussed managing it with Oman.
US Position
Donald Trump said the Strait of Hormuz remained open and threatened to bomb Oman over the proposed arrangement.
Diplomatic prospects
Iran's Position
Iran's position, as reported, reflected a diplomatic deadlock and reduced prospects for a lasting peace agreement.
US Position
Media reports cited possible US back-channel talks with Iran's Islamic Revolutionary Guard Corps, despite Washington's public refusal to extend the ceasefire.
Key facts
- Sensex close
- 77,235.46, down 493 points or 0.63% on Tuesday
- Nifty 50 close
- 24,154.90, down 133 points or 0.55%; its sixth consecutive session of losses
- GIFT Nifty
- Around 24,187, down nearly 42.60 points from the previous Nifty futures close
- Asian markets
- Kospi fell 5.89% at the open, Kosdaq dropped 3.62%, Nikkei 225 declined 1.04%, and S&P/ASX 200 fell 0.50%
- Crude oil
- Brent rose to $91.28 per barrel and WTI to $85.31 per barrel
- Indian rupee
- The rupee weakened toward ₹95.68 per dollar, while reported RBI intervention limited the decline
- Gold
- Spot gold rose 0.2% to $4,342.33 per ounce; December US gold futures fell 0.6% to $4,396.30
- Wall Street
- The Dow fell 0.2%, S&P 500 declined 0.7%, and Nasdaq Composite dropped 1.3% in the previous session
Quotes
Ajit Mishra – SVP, Research, Religare Broking
Senior Vice President of Research at Religare Broking
“"Investor sentiment remained subdued as Brent crude climbed above $91 per barrel following the expiry of the temporary US‑Iran ceasefire, with Iran adopting a more aggressive stance and the US ruling out an extension."”
livemint.com
“"Indian equity markets are expected to trade with a cautious bias as renewed strength in crude oil prices and persistent geopolitical uncertainty continue to weigh on investor sentiment."”
livemint.com
Sources
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