Indian markets fell on Monday as a surge in crude oil prices tied to the US-Iran standoff weighed on sentiment.
The Sensex closed at 76,132.81, down 382.62 points, and the Nifty settled at 23,779.15, down 118.55 points on the session.
Friday’s close had been firmer, with the Sensex at 76,515.43 and the Nifty at 23,897.70, before Monday’s pullback.
Expectations of a further US rate hike, after stronger-than-expected jobs data, also added to the pressure on Indian equities.
The Strait of Hormuz, through which roughly a fifth of the world’s oil moves, is a key global chokepoint, so escalating tension near it tends to move oil prices, and oil-importing markets like India, quickly.
Market participants said they would watch upcoming US Federal Reserve commentary and further developments in the Gulf region for cues on near-term direction.
Brent crude approached $97 a barrel during the session, its highest level in months, as the escalating US-Iran standoff around the Strait of Hormuz raised fears of supply disruption from the Gulf.
IT stocks were the worst-hit sector, since higher US interest rates weigh on Indian technology firms that generate a large share of their revenue from American clients.
Oil-sensitive sectors including aviation, paints, tyres and logistics also came under pressure as elevated crude prices raise input and fuel costs for these industries.
Foreign institutional investors were net sellers in Indian equities during the session, adding to the downward pressure alongside the global cues.
Stronger-than-expected US jobs data released over the weekend increased expectations that the Federal Reserve could raise interest rates again, further denting risk appetite in emerging markets including India.
The Nifty had struggled to sustain above the 24,000 mark in recent sessions, facing technical resistance near 24,025 even before Monday’s decline.
Both benchmark indices had closed higher in the previous session on Friday, with the Sensex at 76,515.43 and the Nifty at 23,897.70, before Monday’s reversal.
Bombay Stock Exchange building, Mumbai, Wikimedia Commons, CC BY 2.0
