Mumbai: The impact of the sharp rise in crude oil prices amid increasing tension in West Asia was clearly visible on the domestic stock market on Friday. The Sensex fell by more than 628 points in early trade, while the Nifty also fell below the 23,300 level. Weak global markets and continuous selling by foreign investors also put pressure on market sentiment.
BSE Sensex fell 628.24 points to 74,257.69 in early trade. Similarly, NSE Nifty was seen trading at 23,255.10 points, falling by 221.20 points.
The biggest decline in these shares
Among the 30 companies included in the Sensex, shares of Bajaj Finance, InterGlobe Aviation, Mahindra & Mahindra, Tata Steel, UltraTech Cement and Axis Bank recorded the biggest decline during early trading.
However, the market was not completely red. Shares of Tech Mahindra, HCL Tech, Infosys, Bharti Airtel and ITC were trading with gains.
Brent crude at $ 108.7 per barrel
Due to increasing tension in West Asia, the prices of crude oil have increased in the international market. The futures price of international oil standard Brent crude rose 0.95 percent to $ 108.7 per barrel.
The rise in crude oil may increase market concerns for a big importing country like India. This affects investor sentiment due to the fear of inflation and impact on companies' costs.
Pressure in Asian markets too
Along with the Indian market, there was also a weak trend in the major stock markets of Asia. South Korea's Kospi, Japan's Nikkei 225, China's SSE Composite and Hong Kong's Hang Seng were trading with losses.
American markets also closed with a decline on Thursday, the effect of which was visible on the initial trend of Asian and Indian markets on Friday.
FII selling increased concerns
Selling by foreign investors is also increasing pressure on the market. According to stock market data, foreign institutional investors (FIIs) made a net sale of shares worth Rs 438.24 crore on Thursday.
Earlier on Thursday, Sensex had closed with a gain of 138.36 points and Nifty with a gain of 46.30 points.
What does it mean for the common investor?
The impact of the sharp rise in crude oil prices and tensions in West Asia is not limited to the stock market alone. Due to oil becoming expensive, import costs may increase, which may impact inflation, companies' costs and market sentiment. In such a situation, the price of crude oil and the activities of foreign investors will be important signals for the market in the coming trading sessions.
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