2 weeks ago
Sensex, Nifty drop as crude hits $91 on Iran-US tensions
Imagine a big shop where people buy and sell pieces of companies, called stocks.
The Sensex and Nifty are like scoreboards that show how those stocks are doing in India.
On Tuesday, the scoreboards went down.
One reason is that oil, which is used to make fuel, became more expensive.
Oil prices went above $91 for a barrel.
This happened because the United States and Iran are having a disagreement, and people worry that oil supplies could be disrupted.
When oil gets expensive, companies have to pay more to run their businesses, so investors feel worried.
Also, money from foreign investors became less attractive because interest rates in the US went up.
Some experts think India's economy is strong and companies will earn more money soon, which could help.
But for now, the markets are moving up and down because of these worries.
Sensex and Nifty fell in early trade on Tuesday, with Sensex down 278.32 points to 77,450.64 and Nifty down 57.65 points to 24,230.45 (one report cited a 365-point Sensex drop to 77,362).
Brent crude rose 0.63% to $91.46 per barrel amid escalating Iran-US tensions and fading hopes of a ceasefire.
The US 10-year Treasury yield climbed to 4.73%, which analysts said could be negative for foreign institutional investor inflows.
FIIs offloaded equities worth Rs 2,535.10 crore on Monday, when Sensex and Nifty fell for a fifth straight session.
Analysts said a resilient Indian economy and signs of an earnings turnaround could support markets, while geopolitical tensions keep them volatile.
- Who
- Indian stock market investors; analysts V K Vijayakumar of Geojit Investments and Rajesh Palviya of Axis Direct commented on the moves.
- What
- Sensex and Nifty declined in early trade as Brent crude rose above $91 per barrel amid Iran-US tensions.
- Where
- India, with trading centered in Mumbai; Asian and US markets also moved lower.
- When
- Tuesday, in early trading.
- Why
- Rising crude oil prices, escalating Iran-US tensions, and higher US 10-year Treasury yields weighed on investor sentiment.
Bearish View
Bullish View
Impact of crude oil and bond yields on equities
Bearish View
Brent crude above $91 and US 10-year yield at 4.73% weigh on sentiment and could hurt FII inflows, keeping markets volatile.
Bullish View
A resilient Indian economy, signs of an earnings growth turnaround, and potential buying by domestic institutional and retail investors could support equities.
Key facts
- Sensex (early trade)
- 77,450.64, down 278.32 points (one report: 77,362, down 365 points)
- Nifty (early trade)
- 24,230.45, down 57.65 points (one report: 24,211, down 76 points)
- Brent crude
- $91.46 per barrel, up 0.63%
- US 10-year Treasury yield
- 4.73%
- FII net selling (Monday)
- Rs 2,535.10 crore
- Monday's Sensex close
- 77,728.16, down 281.09 points
- Monday's Nifty close
- 24,287.65, down 78.35 points
- Top Sensex laggards
- Bharti Airtel, Asian Paints, InterGlobe Aviation, Infosys, HCL Tech, Tech Mahindra
Quotes
V K Vijayakumar
Chief Investment Strategist, Geojit Investments Ltd
“Two developments during the last several hours are likely to impact the market today, at least in the early hours of trading. One, Brent crude has again spiked above USD 91 on escalation of tensions between Iran and the US. Two, the US 10-year bond yield has increased to 4.73 per cent and this is negative for FII inflows which had turned positive in July and August so far”
telegraphindia.com








