Fears of the West Asian conflict engulfing vital oil installations in the region along with heavy foreign fund outflows dragged stocks down on Thursday, with the Sensex plummeting 1769.19 points and investors turning poorer by ₹9.78 trillion.
Investors are panicky about Israel targeting Iran’s oil refineries which could hurt supplies and push up the prices of the crucial feedstock.
The tensions have led to overseas investors junking riskier assets such as stocks in favour of safe haven gold. Provisional data showed foreign portfolio investors (FPIs) dumping a whopping ₹15,243 crore of stocks.
Analysts fear FPI outflows could migrate to China which had recently announced a raft of measures to boost its economy and where valuations are relatively cheaper than India.
The Sensex tanked 1769.19 points or 2.10 per cent to end at 82497.10. Earlier during the day, it plummeted 1832.27 points to a low of 82434.02. The broader markets were also hit with the BSE midcap index losing 2.27 per cent and the smallcap index down 1.84 per cent. The NSE Nifty slumped 546.80 points or 2.12 per cent to 25250.10 with 48 of its constituents ending lower.
“There was carnage on Dalal Street as markets plunged on across-the-board selling pressure on twin concerns of foreign funds pulling out funds from emerging markets, including India, and steadily increasing exposure to Chinese markets after the recent stimulus measures, while the escalating tensions in West Asia too has set alarm bells amongst the investors,” Prashanth Tapse, senior VP (Research), at Mehta Equities, said.
``Global factors such as the surge in Brent crude prices, escalation in West Asian war, and potential outflow of FIIs from India to China dampened sentiments. We expect the market to witness volatility in the near term with stock-specific action as the companies will announce pre-quarterly updates,’’ Siddhartha Khemka, head — research, wealth management, Motilal Oswal Financial Services, said.
The rupee depreciated 15 paise to settle at 83.96 on Thursday as the volatile geopolitical situation triggered a surge in crude oil prices even as the stock markets tanked.
Oil price
Oil prices rose on Thursday on investor concern that a widening West Asian conflict could disrupt crude oil flows from the region, though a stronger global supply outlook kept a lid on gains.
Brent crude futures were up $1.52, or 2.06 per cent, at $75.42 a barrel. US West Texas Intermediate crude futures rose $1.58, or 2.25 per cent, to $71.68.
