Mumbai : Benchmark stock market indices crashed in early trade over rising crude oil prices due to the Iran war involving Israel and the US. Investor sentiment has been bearish and it reflected in the selloff on Dalal Street. Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said that brent crude has spiked above $115 delivering a big oil shock to economies and markets.
The market will price-in the economic consequences of this oil shock. Inflation will certainly move up whether the oil price hike is passed on to consumers or not., he added. At the opening bell, markets saw heavy selling across the board. Reliance Industries Ltd was among the least impacted stocks, slipping 0.04%. Infosys Ltd declined 0.89%, while Sun Pharmaceutical Industries Ltd fell 1.00%. Tech Mahindra Ltd dropped 1.01% and HCL Technologies Ltd was down 1.03%.
IndusInd Bank Ltd saw the sharpest fall, tumbling 7.55%. State Bank of India Ltd declined 5.56%, Larsen and Toubro Ltd fell 4.87%, Tata Steel Ltd slipped 4.61%, and Maruti Suzuki India Ltd dropped 4.55%, reflecting broad weakness in early trade. “The lesson from history is that the impact of geopolitical issues like conflicts on markets do not last long. Therefore, investors have to be patient,” he added. Volatility rose sharply in early trade, with India VIX jumping 21.52%. In the broader market, Nifty Midcap 100 fell 3.04% and Nifty Smallcap 100 declined 3.06%.
Most sectoral indices were in the red. Nifty Auto dropped 3.89%, Nifty Financial Services 25/50 fell 3.66%, Nifty FMCG declined 2.19%, Nifty IT slipped 1.26%, Nifty Media was down 3.16%, Nifty Metal fell 3.13%, Nifty Pharma declined 1.61%, Nifty PSU Bank dropped 5.32%, Nifty Private Bank was down 3.63%, Nifty Realty slipped 2.82%, Nifty Healthcare Index declined 1.74%, Nifty Consumer Durables fell 2.86%, and Nifty Oil & Gas dropped 2.67%. Domestic consumption segments like banking and financials, automobiles, telecom and cement will not be impacted much by the crisis.
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