Escalating geopolitical tensions in West Asia and persistent foreign fund outflows trigger a significant plunge in the Sensex and Nifty, raising concerns about the stability of the Indian stock market.
Photograph: Shailesh Andrade/Reuters
Sensex and Nifty50 Performance: Key Market Highlights Today
- The Sensex and Nifty indices experienced a sharp decline due to escalating geopolitical tensions in West Asia and rising crude oil prices.
- Foreign Institutional Investors (FIIs) have withdrawn substantial funds from Indian equities, contributing to the market’s weakness.
- Escalating tensions in the Middle East, particularly missile strikes on Israel, have heightened fears of prolonged instability and impacted investor sentiment.
- Rising crude oil prices, driven by the conflict, are raising concerns about their potential impact on India’s economic growth.
- Asian markets broadly experienced declines, reflecting the global impact of the geopolitical uncertainty.
Equity benchmark indices Sensex and Nifty tumbled in early trade on Monday as the ongoing war in West Asia continue to rattle markets globally, driving crude oil prices higher.
Unabated foreign fund outflows also added to the weakness in domestic equities.
The 30-share BSE Sensex tumbled 1,191.24 points to 72,391.98 in early trade.
The 50-share NSE Nifty slumped 349.45 points to 22,470.15.
Sector Winners and Losers on Dalal Street
From the 30-Sensex firms, Axis Bank, Kotak Mahindra Bank, Bajaj Finserv, Bajaj Finance, Bharti Airtel and ICICI Bank were among the biggest laggards.
Bharat Electronics, Reliance Industries, Power Grid, Tata Consultancy Services and Hindustan Unilever were the gainers.
Brent crude, the global oil benchmark, jumped 2.32 per cent lower to $115.3 per barrel.
In Asian markets, South Korea’s benchmark Kospi and Japan’s Nikkei 225 index and Hong Kong’s Hang Seng index were quoting sharply lower, while Shanghai’s SSE Composite index traded in positive territory.
The US market ended significantly lower on Friday. The Nasdaq Composite index tanked 2.15 per cent, while Dow Jones Industrial Average lost 1.73 per cent and S&P 500 declined by 1.67 per cent.
Foreign Investment and Market Sentiment
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 4,367.30 crore on Friday, according to exchange data. Domestic Institutional Investors (DIIs), however, bought stocks worth Rs 3,566.15 crore.
Foreign investors have pulled out Rs 1.14 lakh crore (about $12.3 billion) from domestic equities in March, making it the worst monthly outflow, weighed down by escalating tensions in West Asia, a weakening rupee and concerns over the impact of elevated crude oil prices on India’s growth.
“The pressure is largely external, as escalating geopolitical tensions and surging crude oil prices continue to dominate investor sentiment. Asian markets have opened with significant cuts, with South Korea’s Kospi and Japan’s Nikkei declining sharply.
“The broad-based weakness comes as the Middle East conflict enters its fifth week, with fresh escalation after Yemen’s Houthis reportedly launched missile strikes on Israel.
“This marks a widening of the conflict footprint and has heightened fears of prolonged instability in the region,” Hariprasad K, Research Analyst and Founder, Livelong Wealth, said.