New Delhi, 09 April (H.S.):
India's benchmark stock indices suffered a sharp decline today, erasing gains from five consecutive sessions of robust performance, primarily due to uncertainty surrounding the Middle East ceasefire, surging crude oil prices, rupee depreciation, and widespread profit booking.
The Sensex plummeted by as much as 1,251 points during trading, while the Nifty dropped 314.55 points at its nadir, though both indices clawed back some losses in late-session buying. Market experts attribute the rout to feeble global cues, sustained foreign investor sell-offs, and a spike in the India VIX volatility index, which climbed to 20.29, signaling heightened investor trepidation.
Profit-taking intensified after Wednesday's nearly four percent rally, with domestic investors cashing in on recent advances. Sectors like IT and banking bore the brunt, as the Nifty IT index fell 1.3 percent before partial recovery, while banking stocks faced relentless selling pressure.
Uncertainty over the US-Israel-Iran ceasefire fueled global jitters, exacerbated by Israel's strikes on Lebanon and US dismissal of Iran's terms as absurd and childish, prompting investors to adopt a risk-off stance. Prashant Dhami, Vice President at Dhami Securities, noted that this ambiguity recreated a climate of fear across world markets.
Compounding the pressure, Iran's renewed threat to close the Strait of Hormuz propelled crude prices higher, with Brent crude surging to $98.85 per barrel and West Texas Intermediate (WTI) to $99.69 per barrel. The oil spike boosted dollar demand, weakening the rupee to 92.94 against the dollar before a modest rebound.
Rajiv Dutta, CEO of Capex Gold and Investments Private Limited, highlighted how ceasefire delays cast a pall over global sentiment, dragging Asian markets like Kospi, Hang Seng, Straits Times, and Shanghai Composite into the red, which rippled into Gift Nifty and domestic bourses. Foreign institutional investors (FIIs) continued offloading positions to safeguard capital amid the suspense.
This confluence of factors underscores the markets' vulnerability to international flashpoints, with analysts urging caution until geopolitical clarity emerges.
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Hindusthan Samachar / Jun Sarkar
