Sensex Drops 400 Points, Nifty Below 23,900 as Oil Rally Sparks Sell-Off
Indian indices continued to extend its losses for the fifth consecutive session, with the Sensex falling over 400 points and the Nifty holding below 23,900 amid a sustained rally in oil prices along with persistent FII outflows and subdued global cues.
Both the indices opened with a gap-down on Friday with Sensex opening at 75,708.19 as against the previous close of 76,391.39 and Nifty at 23,666.35 as against the previous close of 23,869.60.
Sensex was trading at around 75,984.17, down 407.22 points or 0.53 per cent while Nifty was trading at around 23,736.65, down 132.95 points or 0.56 per cent at the time of reporting.
Sectorally, almost all indices traded in the red while Nifty Auto and Media were trading in the positive territory, inching 0.69 and 0.22 per cent. At the same time, all broad market indices were trading in the red.
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On BSE, HCL Tech, TCS, and Tech Mahindra were the top gainers while Eternal, Indi Go, Bharti Airtel, Maruti, LT, Infosys, Bajaj Finance, HDFC Bank, Kotak Bank, Power Grid, SBI, ITC among others were the top losers.
Are rising oil prices triggering a deeper sell-off in Sensex and Nifty?
Brent crude had crossed the $100/barrel mark for the first time since late May, and was trading at around $100.67 per barrel while crude oil was trading at around $91.95 per barrel at the time of reporting.
"Heavily oversold market, will see a bounce back but will need a geopolitical catalyst to do that. Waiting for the weekend. Trump has promised a massive attack on Iran. We will have to wait and see if its rhetoric or more ineffective bombings will happen, even though it is clear that those are serving no purpose," he said.
Devarsh Vakil, HSL Prime Research said, "Nifty has fallen below its key averages and headed towards the 23645-23500 zone, while 24,000-24,100 is likely to remain a strong resistance zone," he noted.
"Oil prices spiked after Houthi forces struck Saudi tankers in the Red Sea, opening a new front alongside ongoing disruptions in the Strait of Hormuz,” Vakil further added.
“Brent crude topped $100 a barrel for the first time since late May. Crude is now up sharply both on the month and year-to-date, as continued U.S. strikes on Iran and collapsing ceasefire hopes reignite fears of persistent inflation,” he said.
“The Indian rupee remains under heavy pressure due to elevated international oil prices, which threaten to expand India's trade deficit and accelerate national inflation,” Vakil added.
(With inputs from ANI)