Virendra Pandit
New Delhi: On a day Prime Minister Narendra Modi told the Lok Sabha that the ongoing Iran crisis has posed unprecedented challenges for India, the country’s stock markets shed nearly 2.5 percent of their value as the West Asian conflict intensified with the US’s 48-hour warning to Iran to reopen the Strait of Hormuz for the safety of ships running out.
PM Modi flagged the risks to energy supply, trade routes, and the Indian diaspora as an Iran war disrupting the Strait of Hormuz, raising concerns over oil, LPG imports, and global economic stability.
Benchmark Sensex and Nifty50 tanked nearly 2.5 percent, fueling worries over energy supply. While the Nifty50 ended 601.85 points or 2.60 percent down at 22,512.65, Sensex ended 2.46 percent or 1,836.57 points down at 72,696.39. The Indian rupee touched a record low, at Rs. 94 per USD,
The market-cap of all the BSE-listed companies declined Rs.14 trillion to Rs. 414.76 trillion, compared to Rs. 428.76 trillion at last Friday’s close, the media reported.
The Nifty India volatility index jumped 19.11 percent to 27.17 so far in Monday’s session. It closed 17.17 percent higher at 26.73.
Broader markets underperformed benchmark indices. The Nifty MidCap and the Nifty SmallCap indices were trading 3.69 per cent and 4.16 per cent down, respectively.
Sector-wise, the Nifty Construction Durable tumbled over 5 percent to become the top loser. The Nifty Realty and the Nifty Metal also underperformed.
But the Nifty IT outperformed with least losses.
Brent crude rose after US President Donald Trump warned that they would obliterate Iran’s power plans if the country didn’t open the Strait of Hormuz within 48 hours. In retaliation, Iran also threatened to strike energy infrastructure in West Asia.
Brent crude was quoting at USD 108.73 per barrel, up 2.37 percent in the Intercontinental Exchange.
In the emerging global uncertainties, Indian equity benchmarks continued to suffer a steep sell-off amid heightened risk aversion worldwide. The decline mirrored weakness in Asian equities, while the rupee touched a record low, at Rs. 94 per USD, weighed down by escalating West Asia tensions and surging crude oil prices.
Market breadth was heavily negative, with 2,995 NSE stocks falling versus 228 advancing. Metals, smallcaps, and select midcaps faced the sharpest cuts, reflecting widespread profit booking and intense bearish sentiment. Only a few IT and energy stocks, including Tech Mahindra, HCL Tech, ONGC, and TCS, managed modest gains.
Comments are closed.