3 weeks ago
Oil surge weighs on sentiment; Sensex slides, Nifty below 24,500
On Tuesday, India's stock market went down.
Two important market measures, called the Sensex and the Nifty, both fell by about half a percent.
The Nifty slipped below a big round number, 24,500.
The main reason was that the price of oil jumped a lot.
When oil gets expensive, people worry that the prices of other things will rise too.
Investors were also worried about shipping problems at the Strait of Hormuz, a very important sea route, and about talks between the United States and Iran.
Some companies, like Infosys and Tata Consultancy Services, did well that day.
Others, like Bharti Airtel and Axis Bank, did not do as well.
Markets in Asia were mixed, and Japan's market was closed for a holiday.
Overall, investors were cautious about what might happen next.
The BSE Sensex dropped 388.19 points, or 0.49 per cent, to settle at 78,154.25 on Tuesday, after falling 494.18 points intraday to 78,048.26.
The NSE Nifty declined 112.10 points, or 0.46 per cent, to close at 24,471.70, slipping below the 24,500 mark.
Brent crude jumped 2.18 per cent to USD 89.63 per barrel on geopolitical uncertainties, including concerns over Strait of Hormuz disruptions and US-Iran negotiations.
UltraTech Cement, Axis Bank, InterGlobe Aviation, Bharti Airtel, Bajaj Finance and Power Grid led Sensex losses, while Eternal, Infosys, Titan, HCL Tech and Tata Consultancy Services gained.
Asian markets were mixed - South Korea's KOSPI ended higher while Shanghai's SSE Composite and Hong Kong's Hang Seng settled lower - with Japan closed for a holiday and European markets trading mixed.
- Who
- Investors trading on India's benchmark indices, companies in the Sensex pack, and market analysts including Hariselvan Radhakrishnan of HST Wealth, Vinod Nair of Geojit Investments and Ajit Mishra of Religare Broking.
- What
- Indian benchmark indices Sensex and Nifty ended lower as a sharp rally in crude oil prices, driven by geopolitical uncertainties, dented investor sentiment.
- Where
- Indian equity markets (BSE and NSE) in Mumbai, with broader context from Asian, European and US markets.
- When
- Tuesday, during the trading session described in the articles.
- Why
- A jump in Brent crude towards USD 90 per barrel, on concerns over Strait of Hormuz disruptions and US-Iran negotiations, shifted attention back to inflation risks, while volatility linked to the weekly F&O expiry also weighed on sentiment.
Supportive fundamentals perspective
Geopolitical risk perspective
Reading of the market decline
Supportive fundamentals perspective
The downside was cushioned by a supportive earnings backdrop: FIIs bought equities worth Rs 1,974.76 crore on Monday, and some segments such as the BSE SmallCap Select index ended higher by 0.38 per cent.
Geopolitical risk perspective
The dominant headwind was the renewed surge in global oil prices, with Brent moving towards USD 90 per barrel as hopes of an early US-Iran agreement faded; Strait of Hormuz disruption concerns and inflation worries kept sentiment guarded.
Key facts
- Sensex close (Tuesday)
- 78,154.25, down 388.19 points (0.49%)
- Sensex intraday low
- 78,048.26, down 494.18 points (0.62%)
- Nifty close (Tuesday)
- 24,471.70, down 112.10 points (0.46%)
- Brent crude price
- USD 89.63 per barrel, up 2.18%
- Top Sensex laggards
- UltraTech Cement, Axis Bank, InterGlobe Aviation, Bharti Airtel, Bajaj Finance, Power Grid
- Top Sensex gainers
- Eternal, Infosys, Titan, HCL Tech, Tata Consultancy Services
- FII buying (Monday)
- Rs 1,974.76 crore
- Notable sectoral moves
- Hospitals down 1.82%; Focused IT, IT, Energy among winners
Quotes
Hariselvan Radhakrishnan
Founder & CEO of HST Wealth, a research analyst firm
“A sharp rebound in crude prices shifted market attention back to inflation risks, tempering investor enthusiasm despite a supportive earnings backdrop. Concerns over the disruptions in the Strait of Hormuz and the US-Iran negotiations kept sentiment guarded, particularly ahead of key inflation prints in India and the US”
thehansindia.com
telegraphindia.com
“Markets traded under pressure on Tuesday, extending their cautious tone amid renewed geopolitical concerns and rising crude oil prices. Investor sentiment remained subdued amid a renewed rise in crude oil prices, with Brent crude moving towards the USD 90 per barrel mark as hopes of an early US-Iran agreement faded”
thehansindia.com
Sources
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