Nifty falls for 7th day, Sensex down 326 points as rising crude oil prices unnerve investors

Key points

NEW DELHI: Benchmark equity indices Sensex and Nifty closed lower on Wednesday as elevated crude oil prices against the backdrop of a lack of a diplomatic resolution following the end of the US-Iran ceasefire dented investor sentiment.

Falling for the fourth consecutive day, the 30-share BSE Sensex dropped by 325.78 points, or 0.42 per cent, to settle at 76,909.68. During the day, it dropped 412.57 points, or 0.53 per cent, to 76,822.89. In the last four days, the benchmark has lost 1,170.28 points, or 1.49 per cent.

Extending its losses to the seventh day, the 50-share NSE Nifty declined 76.60 points, or 0.32 per cent, to end at 24,078.30. It has tumbled 505.5 points, or 2 per cent, in the last seven sessions.

The expiry of the temporary 60-day US-Iran ceasefire without any meaningful diplomatic breakthrough has renewed concerns over a prolonged disruption to energy supplies, driving crude oil costs higher, an expert said.

What happened

From the Sensex pack, Power Grid, Bajaj Finance, Larsen & Toubro, ITC, Hindustan Unilever and Reliance Industries were among the major laggards.

HCL Tech, Eternal, Kotak Mahindra Bank and Sun Pharma were among the winners.

Brent crude, the global oil benchmark, jumped 1.04 per cent to USD 91.97 per barrel.

As investors remained concerned that the Federal Reserve’s battle against inflation may continue, “Markets turned cautious ahead of the release of the US FOMC minutes. The lack of a diplomatic resolution following the end of the US-Iran ceasefire kept crude oil costs and bond yields elevated, strengthening risk-off sentiment,” said Vinod Nair, Head of Research, Geojit Investments Ltd.

The details

Broader markets also declined as the BSE SmallCap Select index dropped 0.73 per cent and MidCap Select index by 0.01 per cent.

Among sectoral indices, Power lost 1.69 per cent, followed by Capital Goods (1.59 per cent), Utilities (1.25 per cent), Industrials (1.15 per cent), Hospitals (0.89 per cent), Energy (0.68 per cent) and Commodities (0.62 per cent).

Housing Finance climbed 0.58 per cent, Focused IT (0.33 per cent), IT (0.27 per cent) and MidSmall Private Banks (0.03 per cent).

“Indian equity markets extended their losing streak to a seventh consecutive session on Wednesday as weakness across global equities spilled over into domestic trading, with higher bond yields, elevated crude oil prices and a sharp correction in technology shares undermining investor confidence,” Hariselvan Radhakrishnan, Founder & CEO of HST Wealth, a Research Analyst firm, said.

Why it matters

Asian markets endured one of their weakest sessions in recent months. While Japan’s Nikkei 225 fell more than 3 per cent as the recent technology-led rally reversed sharply under pressure from rising global bond yields and heavy selling in semiconductor stocks, he went on, south Korea’s Kospi plunged nearly 6 per cent, triggering a trading curb.

South Korea’s Kospi tanked 5.80 per cent. While Hong Kong’s Hang Seng index settled marginally higher, japan’s Nikkei 225 and Shanghai’s SSE Composite index also concluded significantly lower.

Markets in Europe were trading in negative territory. US markets ended lower on Tuesday.

Foreign Institutional Investors (FIIs) bought equities worth Rs 1,651.53 crore on Tuesday, according to exchange data.

Background

On Tuesday, the Sensex was down 492.70 points, or 0.63 per cent, to settle at 77,235.46. The Nifty declined for the sixth day, sliding 132.75 points, or 0.55 per cent, to end at 24,154.90.