2 days ago
Indian Stocks Close Lower as West Asia Tensions Lift Crude
Indian share prices finished lower on Monday.
The Sensex and Nifty are measures that track large companies listed in India.
Prices fell after tensions between the United States and Iran pushed oil prices higher.
Brent crude ended above USD 91 per barrel.
Investors worried that expensive oil could increase inflation and keep interest rates high.
Comments linked to the US Federal Reserve also increased expectations of a possible September rate hike.
Foreign investors had sold Indian shares worth Rs 5,039.80 crore on Friday.
Some companies, including Adani Ports and HDFC Bank, fell, while several banks and Sun Pharma gained.
The Sensex fell 307.24 points to 76,957.27, while the Nifty declined 95.25 points to 24,080.40 at Monday’s close.
The Sensex had dropped as much as 513.19 points during the session after falling 226.60 points in early trade.
Brent crude rose 3.63% to USD 91.30 per barrel as renewed US-Iran tensions raised global energy-supply concerns.
Weak global markets, higher bond yields, possible US rate hikes and foreign fund outflows pressured investor sentiment.
Adani Ports was the biggest Sensex laggard, while Sun Pharma, ICICI Bank, Axis Bank and State Bank of India gained; FIIs sold Rs 5,039.80 crore on Friday.
- Who
- Indian equity investors, foreign institutional investors, analysts and companies listed on the BSE Sensex and NSE Nifty.
- What
- Indian benchmark stock indices declined, while crude oil prices rose amid renewed tensions in West Asia.
- Where
- Indian stock markets, against a backdrop of weaker or mixed Asian, European and US markets.
- When
- Monday, August 31, at the close; the early-trade figures and foreign investor selling cited were also from Monday and the preceding Friday, respectively.
- Why
- Renewed US-Iran tensions, higher crude prices, rising bond yields, possible US rate hikes, weak global markets and foreign fund outflows weighed on sentiment.
Risk concerns
Market outlook
Interest rates and bonds
Risk concerns
Analysts said persistent inflation concerns and comments associated with the US Federal Reserve increased expectations of a possible September rate hike, pushing bond yields higher and weighing on equities.
Market outlook
The cited market outlook did not identify a clear positive counterargument; analysts instead expected Indian markets to trade with a cautious bias and said policy could remain tighter for longer.
Geopolitical risk
Risk concerns
Analysts said renewed US-Iran military escalation raised concerns about global energy supplies, lifted crude prices and created a broader risk-off mood.
Market outlook
The reports provided no opposing analyst view on the effect of the tensions; the market commentary consistently linked the escalation to higher crude prices and weaker sentiment.
Key facts
- Sensex close
- 76,957.27, down 307.24 points or 0.40%
- Nifty close
- 24,080.40, down 95.25 points or 0.39%
- Sensex intraday low
- 76,751.32, after a decline of 513.19 points or 0.66%
- Brent crude
- USD 91.30 per barrel, up 3.63%
- Foreign investor selling
- Foreign Institutional Investors sold equities worth Rs 5,039.80 crore on Friday
- Top Sensex laggard
- Adani Ports fell 4.11%
- Previous close
- On Friday, the Sensex settled at 77,264.51 and the Nifty at 24,175.65
Quotes
V K Vijayakumar
Chief Investment Strategist at Geojit Investments Limited
“This week's trading begins with the market facing a few headwinds. From the global equity market perspective, the sentiments have turned slightly negative following the Fed chief Kevin Warsh's statement that if inflation persists at rates higher than the Fed's long-term target, 'we have work to do'.”
rediff.com
deccanchronicle.com
telegraphindia.com
“Escalating tensions between the US and Iran have kept investors on edge, as fading prospects of a diplomatic breakthrough pushed crude oil prices and global bond yields higher.”
theprint.in
Ponmudi R
CEO of Enrich Money, an online trading and wealth-tech firm
“Indian equity markets ended lower on the final trading day of the month, with the Nifty slipping to a fresh monthly low as renewed US-Iran military escalation sent crude oil prices sharply higher, lifted global bond yields to multi-year highs and reinforced concerns that the Federal Reserve may need to keep policy tighter for longer.”
theprint.in
“Indian equity markets are expected to trade with a cautious bias as renewed US-Iran military escalation revives concerns over global energy supplies, triggering a rebound in crude oil prices and prompting a broader risk-off tone across Asian markets.”
rediff.com
deccanchronicle.com
telegraphindia.com
Sources
Stock Markets Today: Sensex, Nifty Dip on Renewed West Asia Tensions, rising crude
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