Oil market crashed due to ceasefire, Brent crude price fell by 7%, strong rise in stock market

New Delhi, 25 March. A major fall in crude oil prices was seen in the international market on Wednesday amid expectations of a ceasefire in West Asia. Brent crude futures fell 7 per cent to an intraday low of $97.18 a barrel in morning trade, while US WTI crude oil fell more than 6 per cent to $86.72 a barrel. The impact of the fall in crude oil prices was that the Indian stock market opened with strong gains.

Experts say that this fall in crude oil prices can bring relief for India. This may reduce pressure on inflation and current account deficit (CAD). However, technical signals suggest that prices are currently hovering around key levels. According to experts, last week also a decline was seen in the commodity market.

Brent crude, which had recently reached around $101 per barrel, has now fallen by more than 10 percent to around $91. This has reduced the immediate pressure on India’s oil import bill, CAD and rupee. Experts said that for India, every $10 per barrel change in crude oil price impacts CAD relative to GDP by 0.3 to 0.5 per cent and can increase inflation (CPI) by 20-30 basis points.

Analysts say that American crude oil currently remains around the important level of $85 to $87. If the prices go above $92-94 then the uptrend may return and the prices may reach $98-100. At the same time, if there is a fall below $85 then the prices can go up to $81-82.

Overall, experts believe that as long as important support levels hold, a ‘buy the dip’ strategy can be adopted. However, the market may remain volatile due to geopolitical and economic reasons. The recent fall in oil prices may provide some relief to the rupee and inflation, but risks still remain. If oil prices rise again or foreign investment declines, pressure on the rupee may increase again.

Meanwhile, America’s stock markets witnessed a decline. The S&P 500 and Nasdaq closed down 0.84 percent and 0.37 percent, respectively. In contrast, Asian markets witnessed huge gains. Japan’s Nikkei jumped 2253.26 percent, South Korea’s Kospi rose 3.36 percent and Hong Kong’s Hang Seng rose 1.30 percent.

Sensex and Nifty rose by more than two percent

Talking about the Indian stock market, Sensex and Nifty saw an increase of more than two percent in the trading on Wednesday. BSE Sensex rose 1,667.14 points or 2.25 per cent to 75,735.59, while NSE Nifty rose 522.35 points or 2.27 per cent to 23,434.75. On Tuesday, Sensex closed with a gain of 1.89 percent and Nifty with a gain of 1.78 percent.