By Indian markets fell on Monday as climbing crude oil prices amid the US-Iran standoff dented investor confidence.
The Sensex closed at 76,132.81, a fall of 382.62 points, while the Nifty settled at 23,779.15, down 118.55 points on the day.
Friday’s close had been stronger, with the Sensex at 76,515.43 and the Nifty at 23,897.70, before the reversal.
Analysts also pointed to growing expectations of a US rate hike after stronger-than-expected jobs data as an added drag on sentiment.
The Strait of Hormuz, through which roughly a fifth of the world’s oil supply passes, remains a critical chokepoint, meaning any escalation near it tends to move oil prices, and by extension oil-importing markets like India, quickly.
Foreign institutional investors were net sellers in Indian equities during the session, adding to the downward pressure alongside the global cues.
Stronger-than-expected US jobs data released over the weekend increased expectations that the Federal Reserve could raise interest rates again, further denting risk appetite in emerging markets including India.
The Nifty had struggled to sustain above the 24,000 mark in recent sessions, facing technical resistance near 24,025 even before Monday’s decline.
Both benchmark indices had closed higher in the previous session on Friday, with the Sensex at 76,515.43 and the Nifty at 23,897.70, before Monday’s reversal.
Bank Nifty and other rate-sensitive indices also traded weak through the session, tracking the broader risk-off mood among investors.
Market participants said they would watch upcoming US Federal Reserve commentary and further developments in the Gulf region for cues on near-term direction.
Brent crude approached $97 a barrel during the session, its highest level in months, as the escalating US-Iran standoff around the Strait of Hormuz raised fears of supply disruption from the Gulf.
IT stocks were the worst-hit sector, since higher US interest rates weigh on Indian technology firms that generate a large share of their revenue from American clients.
Bombay Stock Exchange building, Mumbai, Wikimedia Commons, CC BY 2.0
