Market meltdown: Investors wipe off ₹10 lakh crore as global tensions, oil prices weigh heavy
Key factors driving the decline include rising crude oil prices ($100/barrel), global market turmoil, foreign investor sell-offs (₹39,000 crore in March) and a weak rupee (record low 92.60/$)
Mumbai (The Uttam Hindu): Indian stock markets fell for the third consecutive day on Friday. Both the main indices, Sensex and Nifty, were trading down by about one percent. At 11:40 am, Sensex was down 706 points or 0.93 percent at 75,334 and Nifty was down 240 points or 1.02 percent at 23,398.
In the trading so far, metal, defence, auto and PSU banks were putting pressure on the market. The indices related to these sectors have fallen by more than 2 percent. The reason for the fall in the market for the third consecutive day is believed to be the rise in crude oil prices, which have again reached $100 per barrel. Due to the blockage of the Strait of Hormuz, WTI crude is hovering around $95 per barrel and Brent crude is hovering around $100 per barrel. The continuous fall in the global market is also giving rise to negative sentiment in the Indian markets. All the major markets in Asia including Seoul, Tokyo, Shanghai, Hong Kong and Jakarta opened in the negative and the US markets also closed with a big fall on Thursday.
Selling by foreign investors is also a reason for the fall in the Indian stock market. According to exchange data, foreign institutional investors (FIIs) sold shares worth Rs 7,049.87 crore on Thursday. So far in March, FIIs have sold shares worth more than Rs 39,000 crore. The continuously increasing pressure on the rupee against the dollar is also a reason for the fall. In Friday's trading so far, the rupee has gained 0.23 paise against the dollar to reach 92.60, which is the lowest level of the rupee against the US currency so far.
Meanwhile, the main reason for the decline is the surge in crude oil prices. Iran's attack on two oil tankers has raised fears of supply disruptions. Brent crude remains around $100.5 per barrel.
The sharp decline in US markets also impacted the Indian market. On Wall Street, the Dow Jones Industrial Average fell more than 700 points, while the S&P 500 and Nasdaq fell more than 1.5%. Investor concerns were heightened by tensions related to Iran.
The rupee also weakened to a record low of 92.37 against the dollar. Meanwhile, investors are now eyeing the US Fed's decision on March 17th.