The Indian stock market will be tested by the spike in global crude oil prices, and the renewed tensions in the Middle East after the United States (US)
President Donald Trump on Monday announced the plans to blockade the Strait of Hormuz. At the time of open on Monday, Sensex was down 1,569.80 points or 2.02 percent at 75,980.45, and the Nifty was down 463.70 points or 1.93 percent at 23,586.90. About 617 shares advanced, 2246 shares declined, and 196 shares unchanged. All the sectors opened in the red with Nifty PSU Bank and Realty were the top laggards down by over 3 per cent. Further, Nifty Auto, Bank, Financial Services, Media, Consumer Durable, and Oil & Gas crashed over 2 per cent each. The overall market capitalisation of BSE-listed firms was at Rs 443 lakh crore around 9:20 am compared to Rs 451 lakh crore in the previous session. Investors lost about Rs 8 lakh crore within minutes. India Volatility Index jumped 14.11 per cent to 21.51, indicating a sudden increase in uncertainty expectation in the near-term. The Indian rupee faced pressure, starting at 93.28 declining 55 paise from Friday's closing value of 92.73/$, following a two-week relief rally. In the pre-market session, the BSE Sensex crashed 1609.77 points, or 2.08 per cent to 75,940.48 levels, and the NSE Nifty50 was at 23,607.05 levels, down by 443.55 points or 1.84 per cent. GIFT Nifty fell below 24,000, indicating a weak start. In the morning trade, GIFT Nifty was around 23,757 in early deals, down about 1.4 percent. Asian market was also at lows in the start as the Japan’s Nikkei was down about 0.4 percent, South Korea’s Kospi fell 1.4 percent, and Australia’s ASX 200 slipped 0.6 percent. The price of United States Crude oil rose 8% to $104.24 a barrel, and Brent crude oil, the international standard, rose 7% to $102.29 after the US said that it would blockade Iranian ports beginning Monday. Gold Bullion also fell as much as 2.2% to dip below $4,650 an ounce, wiping out the previous week’s gain. Since the US-Israel war has begun in the end of February, the Bullion has fallen more than 11%. In India, the cost of 24K gold is at Rs 15,283 per 1 gram, while 22K gold is priced at Rs 14,009 per 1 gram.
