Kolkata: Rising crude oil prices, increasing possibility of the US Fed raising key policy rates in September and negative Asian market cues pulled down
the Indian stock market deep into the red this morning in early trade. Within a few minutes of the beginning of trading Sensex 30 was at 77,043.16, down 0.29% or 221.35, while Nifty 50 was at 24,082.25, down 0.39% or 93.40. On Friday, US FEd chairman Kevin Warsh indicated that there might be an interest rate hike in September, when the rate-setting FOMC meets. Analysts said that in such an eventuality, it would affect the flow of foreign funds into the Indian stock market as in other emerging markets. It would also strengthen the US Dollar further to impact the equity markets adversely.
Crude oil price
Crude il prices jumped more than 2% higher on Monday following news of US forces attacking an Iranian island in the Strait of Hormuz which drew retaliatory attacks from Iran. Brent crude futures climbed $2.51, or 2.85%, to reach $90.61 a barrel while West Texas Intermediate crude was at $85.53, up $2.13, or 2.55%. Incidentally, the conflict in West Asia began with US and Israeli forces bombing Teheran on February 8.
Rupee vs Dollar
The rupee fell 13 paise to reach 95.56 against the US dollar in early trade today. On Friday, the Indian currency rose 6 paise to settle at 95.39 against the US dollar as global crude oil prices declined and the Reserve Bank of India intervened in the market.
Prominent gainers and laggards
A few minutes after trading began, only three stocks were in the green in the Sensex 30 basket. These were HDFCBANK (+1.78%), ETERNAL (+1.16%) and ICICIBANK (+0.08%). The major laggards in the same basket were ASIANPAINT (-1.35%), TATASTEEL (-1.77%), INDIGO (-1.82%), NTPC (-2.05%) and INFY (-2.22%).
Asian markets this morning
The major Asian market indices were mostly in the red this morning. Around 9 AM, GIFT NIFTY was down 0.38%, Nikkei 225 down 1.11%, Straits Times up 0.44%, Hang Seng down 0.68%, Taiwan Weighted down 1.23%, KOSPI down 1.48%, SET Composite up 0.21%, Jakarta Composite down 0.41% and Shanghai Composite down 0.20%.
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