Mumbai, May 11 (). Due to negative global signals amid ongoing tensions in West Asia, the Indian stock market witnessed heavy selling on Monday, the first trading day of the week, and major benchmarks Nifty50 and Sensex closed in the red with a fall of more than 1.5 percent.
At the time of market closing, the 30-share BSE Sensex was down by 1312.91 points or 1.70 percent at 76,015.28, while the NSE Nifty50 fell by 360.30 points (1.49 percent) to reach 23,815.85.
The Sensex fell over 1,300 points or 1.5 per cent to hit the day’s low of 75,957.40 after opening at 76,638.09, while the NSE Nifty fell over 1 per cent to hit the day’s low of 23,799.10 after opening at 23,970.10.
In the broader market, Nifty Midcap index fell 1.05 percent and Nifty Smallcap index fell 1.13 percent.
At the same time, if seen sector wise, the maximum decline was recorded in Nifty Consumer Durable by 3.73 percent and Nifty Realty by 3.05 percent. Along with this, Nifty Media, Nifty PSU Bank and Nifty Oil & Gas fell by more than 2 percent. Apart from this, Nifty Auto, Nifty Financial Services, Nifty Metal and Nifty Private Back also underperformed.
In the Nifty pack, Tata Consumer shares saw the maximum increase of more than 8 percent. After this, a rise of 2.7 percent was recorded in the shares of Max Health. Apart from this, shares of Coal India, Sun Pharma, HUL, Grasim, ONGC, Adani Ports and SBI Life also saw a rise. On the contrary, shares of Titan, Indigo, SBI, Eternal, Jio Financial Services, Bharti Airtel and Reliance recorded the biggest decline and were among the top losers of the day.
During this period, the total market capitalization of BSE listed companies declined to about Rs 467.5 lakh crore from Rs 473.5 lakh crore in the previous session, causing a loss of about Rs 6 lakh crore to investors.
Meanwhile, May futures of Brent crude were seen trading near $103.4 per barrel, up 2.12 percent.
Market expert Sunil Shah said while talking to news agency that the reason for the decline in the stock market is not only the appeal of Prime Minister Narendra Modi, but the biggest reasons behind it are the ongoing tension in West Asia and the continuously high prices of crude oil. He said that last week the market was hopeful that the crisis related to the Strait of Hormuz would end soon and a permanent agreement could be reached after the ceasefire. Due to this expectation, a bullish atmosphere started developing in the market and the prices of crude oil also started coming down.
He further said that earlier crude oil prices had reached $115-120 per barrel, which later came down to around $90. Many projections of India’s GDP growth, corporate earnings and economy were made keeping in mind the crude oil price of $65 to $75 per barrel. But now oil prices remain high for the third consecutive month and there are no signs of the Hormuz crisis ending soon. For this reason, there is panic and uncertainty in the market.
Expert Sunil Shah said that the purpose of Prime Minister Modi’s appeal is to keep the country economically strong. India imports about 70 to 75 percent of its energy needs. He said that the government wants people to use petrol and diesel wisely and postpone unnecessary foreign trips and purchase of gold for some time. This will save dollars, reduce current account deficit and also reduce pressure on the rupee.
He further said that if people reduce unnecessary expenditure and wastage of fuel, both the country’s economy and the corporate sector will benefit from it. According to him, the real concern of the market is still the prices of crude oil. If oil again returns to the range of $65-75 per barrel, it will be a big positive sign for the Indian market and economy.
At the same time, market expert AP Shukla said while talking to that when a big leader of the country makes a serious appeal, it naturally impacts the market and people’s thinking. He said that Prime Minister Modi has appealed to the people to postpone the purchase of gold for a year, reduce the consumption of petrol and diesel and move towards alternative energy.
Experts said that India imports large quantities of crude oil and gold every year, for which huge amounts of dollars are spent. He said that after the start of the Russia-Ukraine war, the rupee has weakened significantly against the dollar and gold prices have also increased rapidly. India imports around 700-800 tonnes of gold every year, while huge foreign exchange is also spent on crude oil.
He said that gold is definitely a good asset class, but most of the gold remains locked in lockers and is not actively used in the economy. On the contrary, if the same money continues to circulate in the economy, it can increase both growth and employment.
Experts said that the ongoing war in West Asia and the situation in the Strait of Hormuz have affected the economy of the entire world. There is instability in global markets due to oil production and supply being affected. He said that big consumer countries like China and India are being affected the most.
He also said that the countries of the world should resolve disputes through mutual dialogue and mediation, because war ultimately affects the economy of all countries. According to him, peace and stability are the biggest basis of global economic development.
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DBP
