Kolkata: Benchmark indices Sensex 30 and Nifty 50 closed well over 1% lower on Wednesday, marking a dull Holi but in line with panic selling in Asian markets with rising conflict between the US and Israel combine and Iran. As a result, as much as Rs 10 lakh crore of investor wealth was wiped out during the day.
Crude oil prices kept rising as the Indian stock indices fell for the fourth consecutive day. At close BSE Sensex dropped 1,122.66 points or 1.40% to settle at 79,116.19 while NSE Nifty dived 385.20 points or 1.55 per cent to end at 24,480.50. Brent crude, the global oil benchmark, surged 3.08% to touch $83.91 per barrel as Iran vowed to destroy any crude oil consignment that would venture to pass through the Strait of Hormuz through which 50% of Indian imports pass.
“Global risk sentiment remained fragile amid ongoing tensions in the Middle East and the closure of the Strait of Hormuz, which kept oil prices volatile. Indian equities mirrored the broader risk‑off environment due to the impact of inflation and the potential for higher CAD…. The continued depreciation of the INR also remains a key concern, while incremental foreign outflows lead to near-term volatility in the market,” Vinod Nair, head of research, Geojit Investments was quoted by PTI as saying.
Rs 10 lakh cr wealth wiped out
The sharp decline in the stock market also had a direct impact on investors’ wealth. The total market capitalization of companies listed on the BSE fell from Rs 456.90 lakh crore in the previous trading session to approximately Rs 446.73 lakh crore, said reports.
On Monday, the Indian stock market bled amid the escalating conflict between Iran and the US-Israel combine. The Sensex crashed 1,048.34 points, or 1.29%, to close at 80,238.85, while the Nifty 50 settled 312.95 points, or 1.24%, lower at 24,865.70. The market was shut on Tuesday, March 3, due to Holi, which gave the market a welcome breather from the mayhem.
Prominent gainers and laggards
In the Sensex basket, Tata Steel, Larsen & Toubro, Bajaj Finance, UltraTech Cement, NTPC, InterGlobe Aviation, Bajaj Finserv and Kotak Mahindra Bank were also among the prominent laggards. Tata Steel plunged 6.76% while Larsen & Toubro declined 4.53% at close. Bharti Airtel, Infosys and Tech Mahindra among the few gainers.
In the morning according to NSE data, the top gainers on Wednesday were COALINDIA, INFY, ONGC, HCLTECH and TCS. Only these stocks were in the green and three of the five were IT stocks. The extent of gain was from 1.68% to 0.34%.
Points of concern
“With the war escalating and crude oil rising, markets are going into a period of heightened uncertainty. Nobody knows how long this conflict will go on and what will be the extent of havoc it could wreck. From the perspective of India, which relies on imports for around 85% of oil requirements, the real concern is the potential inflation and its consequences on economic growth,” VK Vijayakumar, Chief Investment Strategist, Geojit Investments, was quoted in the media as saying. He highlighted concerns such as widening trade deficit, depreciating currency, higher inflation and perhaps lower growth.
On Monday, foreign institutional investors offloaded equities worth Rs 3,295.64 crore, revealed exchange data while domestic institutional investors purchased stocks worth Rs 8,593.87 crore.
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