Why Are Indian Markets Struggling? Insights on Falling Indices Amid Rising Crude Prices
Market Overview
Mumbai: On Tuesday, the benchmark indices in the market faced a downturn, with the Sensex dropping by 493 points and the Nifty falling to 24,154.90. This decline was largely influenced by high crude oil prices and diminishing expectations for a diplomatic resolution in West Asia, which negatively impacted investor sentiment.
The BSE Sensex, comprising 30 shares, fell by 492.70 points, equivalent to a 0.63 percent decrease, closing at 77,235.46. This marked the third consecutive day of losses, with a notable drop of 493.8 points towards the end of trading.
The NSE Nifty, which includes 50 shares, also experienced a decline for the sixth day in a row, decreasing by 132.75 points or 0.55 percent, finishing at 24,154.90.
Among the major losers in the Sensex group were Asian Paints, Infosys, HCL Tech, Bharti Airtel, Tata Consultancy Services, and Hindustan Unilever.
Conversely, Axis Bank, Power Grid, Mahindra & Mahindra, and Bajaj Finance managed to record gains.
Brent crude, the global oil benchmark, saw a slight increase of 0.17 percent, reaching USD 91.02 per barrel.
Vinod Nair, Head of Research at Geojit Investments Ltd, noted, "Crude oil has been a significant factor affecting market sentiment, while rising US bond yields and weak global indicators have contributed to a risk-averse atmosphere in Indian equities. Investor concerns have escalated as hopes for a resolution in the Middle East have diminished following the end of the temporary US-Iran ceasefire, raising fears of renewed inflation."
He further explained that the elevated US yields have made emerging markets less appealing, with IT stocks suffering losses due to worries that sustained high interest rates could hinder global technology investments.
In the Asian markets, South Korea's Kospi and Japan's Nikkei 225 closed lower, while Shanghai's SSE Composite index and Hong Kong's Hang Seng index saw slight gains.
European markets displayed mixed trends.
On Monday, US markets also closed in the red.
Ponmudi R, CEO of Enrich Money, an online trading and wealth tech firm, stated, "Indian equity markets have extended their losing streak to six sessions, reflecting weakness in global markets as rising crude oil prices and a significant sell-off in US Treasuries have impacted investor sentiment."
He added that the fading prospects for a diplomatic breakthrough in the Middle East have further dampened risk appetite.
According to exchange data, Foreign Institutional Investors (FIIs) sold equities worth Rs 2,535.10 crore on Monday.
On the previous day, the Sensex had decreased by 281.09 points, or 0.36 percent, closing at 77,728.16, while the Nifty fell by 78.35 points, or 0.32 percent, ending at 24,287.65, marking five days of losses.