Mumbai, April 13 (IANS). After no concrete progress in the peace talks between America and Iran, an atmosphere of panic has arisen in the global markets, the effect of which was clearly visible on the Indian stock market as well. Major indices of the domestic stock market fell by about 2 percent on Monday.
There was a sharp fall in the Sensex and it fell by 2.16 percent or 1,675 points to reach an intraday low of 75,874.85. At the same time, Nifty was also seen trading at 23,555 with a decline of about 500 points i.e. 2.05 percent. Heavy selling was seen in the shares of banking, financial, realty, auto and energy sectors in the market, due to which all the sectoral indices remained in the red.
In this fall, big stocks like Eicher Motors, Maruti Suzuki, Shriram Finance, Bajaj Finance and HDFC Bank were the biggest losers.
If we look at the market category wise, small-cap stocks declined the most. Both Nifty Smallcap 100 and Nifty Smallcap 250 were down around 2-2 percent. Apart from this, the impact of decline in midcap and largecap shares was also clearly visible.
The fear and uncertainty in the market can be gauged from the fact that the Volatility Index, i.e. India VIX, jumped by more than 13 percent.
Experts say that due to increasing geopolitical tensions, investors’ attitude has suddenly become risk averse. Especially the Strait of Hormuz is very important, because a large part of the world’s crude oil passes through this route.
Earlier the prices of crude oil had fallen from $110 to $94-100, but now it has again reached above $105, due to which concerns about inflation and the economy have increased.
This situation is considered even more serious for India, because the country is dependent on imports for more than 85 percent of its oil needs. In such a situation, rising oil prices can increase the current account deficit, put pressure on the rupee and increase inflation.
According to experts, there may be fluctuations in the market this week. Geopolitical developments, inflation figures and quarterly results of companies will be the major reasons behind this.
At the same time, Brent crude jumped 8.61 percent to reach $ 103.40 per barrel, while American WTI crude is trading at $ 105.63, up 9.38 percent.
There was an atmosphere of decline in Asian markets also. Nikkei was seen trading down by more than 1 percent, Hang Seng by 1 percent and Kospi by more than 1 percent. However, Wall Street was mixed, with the S&P 500 closing marginally lower, while the Nasdaq closed marginally higher.
–IANS
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