3 weeks ago
Sensex, Nifty Down as Crude Tops $90 Amid US-Iran Tensions
Stocks are tiny pieces of companies that people can buy and sell.
In India, two big groups of stocks are called the Sensex and the Nifty.
On this day, both went down because investors felt worried.
One big worry was oil, which got more expensive — a barrel of Brent crude cost about $90.
Oil became costlier because there is tension between the United States and Iran, and because a very important shipping route for oil, called the Strait of Hormuz, is tangled up in the dispute.
When oil costs more, companies can spend more money, so investors become cautious.
Some companies, like Mahindra & Mahindra and Bharti Airtel, lost value, while banks like State Bank of India and Asian Paints gained.
Experts said the market was moving sideways, staying in a small range instead of making a strong move up.
Investors were also waiting for new US data about consumer prices.
Market watchers said they were keeping an eye on oil prices and US-Iran talks.
Sensex and Nifty opened lower on Wednesday as Brent crude rose 1.24% to $90.01 per barrel amid US-Iran tensions over the Strait of Hormuz.
In early trade the Sensex dipped 35.99 points to 78,097.31 and the Nifty skidded 31.15 points to 24,444.55; reports differed on later lows, with one citing a 211.37-point Sensex drop and another a 370-point fall to 77,784.
Bharti Airtel, Mahindra & Mahindra, UltraTech Cement, Adani Ports, Titan and Bajaj Finance were the major Sensex laggards, while State Bank of India, Tech Mahindra, Axis Bank and Asian Paints gained.
Foreign Institutional Investors remained net buyers of equities worth Rs 258.55 crore on Tuesday, even as the prior session saw the Sensex fall 388.19 points (0.49%) and the Nifty 112.10 points (0.46%).
US markets ended lower on Tuesday (S&P 500 and Dow down about 0.3%, Nasdaq down 0.6%) ahead of US consumer inflation data, while Asian markets were mixed with South Korea's KOSPI up 4.59% and Hong Kong's Hang Seng lower.
- Who
- Indian benchmark equity indices Sensex and Nifty, investors, and market experts VK Vijayakumar (Geojit Investments) and Ponmudi R (Enrich Money).
- What
- Indian stock indices declined in early trade, pressured by surging Brent crude prices and US-Iran tensions over the reopening of the Strait of Hormuz.
- Where
- India, on the BSE (Sensex) and NSE (Nifty) at Dalal Street, influenced by global factors involving the US, Iran and the Strait of Hormuz, plus mixed Asian and US markets.
- When
- Wednesday's early trading session, with prior-session closing data and FII buying figures reported for Tuesday; US consumer price inflation data was expected on Wednesday.
- Why
- Rising crude oil prices (Brent at $90.01 per barrel), driven by US-Iran skirmishes and the stalemate over reopening the Strait of Hormuz, dampened investor sentiment ahead of US inflation data.
Key facts
- Sensex (early trade)
- Down 35.99 points at 78,097.31
- Sensex (intraday lows)
- Down 211.37 points to 77,953.66 in one report; down 370 points (0.4%) to 77,784 in another
- Nifty (early trade)
- Down 31.15 points at 24,444.55; fell up to 114 points
- Brent crude price
- $90.01 per barrel, up 1.24%
- FII buying (Tuesday)
- Equities worth Rs 258.55 crore
- Previous session close
- Sensex 78,154.25 (-388.19 pts, -0.49%); Nifty 24,471.70 (-112.10 pts, -0.46%)
- US market cues
- S&P 500 and Dow Jones down about 0.3%; Nasdaq Composite down 0.6%
- KOSPI
- Up 4.59%, leading Asian market gains
Quotes
Unnamed Market Analyst
Market expert quoted in the article
“the market was moving sideways despite expectations of an upward breakout. He attributed the lack of momentum to the rise in Brent crude prices and continued uncertainty over US-Iran tensions.”
freepressjournal.in
“"The market is defying a breakout on the upside and is moving sideways. The principal factor restraining a rally is the strengthening Brent crude which has again moved above $89 level."”
rediff.com
Ponmudi R
CEO, Enrich Money, an online trading and wealth-tech firm
“"Overnight cues from Wall Street were subdued, with the S&P 500 and Dow Jones Industrial Average each declining about 0.3 per cent, while the Nasdaq Composite slipped 0.6 per cent, as investors turned cautious ahead of Wednesday's US consumer price inflation data and amid the continuing stalemate between Washington and Tehran over the reopening of the Strait of Hormuz."”
rediff.com
“global cues remained subdued as investors adopted a cautious approach ahead of US consumer inflation data. He added that uncertainty over Washington and Tehran’s discussions regarding the reopening of the Strait of Hormuz continued to affect market sentiment.”
freepressjournal.in
Sources
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