Today, on Friday (March 27), a huge fall was seen in the stock market after the holiday. Here too the pressure of global markets was clearly visible. Shortly after opening, the Sensex fell by 900 points. Nifty fell by more than 260 points and reached around the level of 23,000. Bank Nifty showed a weakness of about 750 points and was trading around 52,945 levels. Markets were trading at their lowest levels of the day.
The volatility index, India VIX, rose 3.7%. While the IT index registered a gain of 0.81%, all other sectoral indices were trading in the red. Especially heavy pressure was seen on sectors like PSU bank, auto, media, private bank and NBFC. Global signals appear to be mixed, yet point to internal pressures. Ongoing tensions in the Middle East and increasing uncertainty between the US and Iran have weakened investor morale. Factors like rising crude oil prices, falling gold and silver rates, and continued selling by FIIs will decide the direction of the market.
What is the latest geopolitical update?
US President Donald Trump has extended the deadline for a possible attack on Iran’s energy facilities by 10 days. He said that on Iran’s request, an extension has been given till April 6. However, earlier Trump had claimed that Iran had given a “gift” to the US by allowing 10 oil tankers to pass through the Strait of Hormuz. On the contrary, Iran has rejected the US ceasefire proposal and has clearly stated that it will not hold any direct talks with the US. As a result, tension remains in the region.
What are the global market signals?
Despite the extension of the strike deadline, there are no signs of respite in the market. GIFT Nifty is trading around 23,050 levels down by around 250 points, indicating a weak start for the domestic market. Although Dow Futures have registered a slight gain of 150 points, the overall market sentiment remains cautious. US markets have also been under pressure. Over the past two days, the Dow fell nearly 160 points, while the Nasdaq saw a decline of 350 points.
What’s happening with crude oil?
Crude oil continues to fluctuate heavily amid tensions in the Middle East. Brent crude oil closed at $97 on Wednesday, but has since recovered to above the $100 level. This is a matter of concern for oil importing countries like India, as it may increase inflationary pressure and put a burden on the current account.
What is the good news for India?
Amidst the current tension, a relief news has emerged. Iran’s Foreign Minister has said that the Strait of Hormuz will remain open to “friendly countries” like India. It is very important for India’s energy security, as a large part of its crude oil imports come through this important sea route.
Why did gold and silver fall so rapidly?
Commodity markets witnessed a sharp decline after Iran rejected the ceasefire proposal. Silver fell by nearly ₹15,000 to below ₹220,000 levels, while gold fell by ₹4,600 to close at around ₹139,500. This suggests that investors are currently adjusting their positions in response to the current uncertainty.