Benchmark equity indices closed sharply lower on Thursday, with the Sensex falling over 1,750 points and the Nifty 50 slipping below 25,250 points, as investors cut their risk appetite amid rising tensions in the Middle East. Losses across sectors dragged key indices heavily. The 30-share BSE Sensex closed 1,769 points, or 2.1%, lower at 82,497, while the broader NSE Nifty dropped 546 points, or 2.12%, to 25,250. The market capitalisation of all companies listed on the BSE declined Rs 9.71 lakh crore to Rs 465.15 lakh crore. Investor concerns mounted after Iran fired a ballistic missile at Israel earlier in the week, raising fears that escalating tensions could disrupt oil supplies from the region. Oil prices rallied throughout the day. The rise in oil prices is negative for commodity importers like India, as crude contributes significantly to the country’s import bill.
Among Sensex stocks, Reliance Industries, HDFC Bank, L&T, Axis Bank and ICICI Bank collectively pulled the index down by 1,015 points, with JSW Steel being the only gainer.
The Nifty oil & gas index fell over 1.2% in early trade, hit by concerns over escalation of the Middle East conflict.
Hindustan Petroleum, IOC and GSPL were the biggest laggards on the index. Meanwhile, fear gauge India VIX jumped 8.9% to 13.06.
Here are today’s key factors.
1. Worries about global economic conditions
One of the main factors contributing to the recent market downturn was the influence of overseas markets. Many global economic problems are worrying investors, especially the possibility of a global recession. The slowdown of major economies and the rise in inflation have led to uncertainty.
This naturally had an effect on the Indian markets, causing a dramatic decline in the Sensex due to withdrawals of capital by foreign investors.2. Increasing cost of crude oil
The steady increase in oil costs is bad news for India.
Since the nation imports a significant amount of crude oil, rising oil prices have a significant impact on the fiscal balance and profitability of businesses in the nation. Increased production costs, narrower profit margins, and pressure on industry profitability are some of the consequences of rising oil prices. The rising cost of oil put pressure on the market today.
