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Indian equity markets witnessed a sharp sell-off as escalating tensions in West Asia rattled investor sentiment. The Sensex plunged 1,500 points while the Nifty dropped nearly 500 points in early trade.
Sensex down 1,500 pts; Nifty falls
Mumbai: The impact of rising tensions between the US and Iran in West Asia was clearly visible on the Indian stock market. The market witnessed a sharp decline in early trading on Wednesday. The BSE Sensex fell by more than 1,500 points to 78,748.30, while the Nifty 50 fell by nearly 500 points to trade at 24,384.15.
Amidst the weakness in the stock market, pressure on the Indian currency also came. The rupee fell by 69 paise to an all-time low of 92.18 against the dollar. The rupee opened at 92.05 in the foreign exchange market and soon fell to 92.18 per dollar. This represents a significant decline from its previous close of 91.49.
Experts say that rising crude oil prices and global uncertainty have weakened investor confidence, which has increased the pressure on the rupee.
Due to the escalating conflict in West Asia, there are fears of a disruption in crude oil supplies. Crude oil futures have risen by about 1.5 percent in the international market. The rise in oil prices could increase pressure on India's import-dependent economy.
While the broader market declined, defense sector stocks saw strength. The escalating tensions have increased investor interest in defense companies. Paras Defence shares, in particular, saw a jump of about 12 percent.
Analysts believe that market volatility may persist until the situation in West Asia returns to normal. Investors are advised to adopt a cautious strategy for now.
The foreign exchange market was closed on Tuesday due to Holi, but as soon as it opened on Wednesday, global developments directly impacted the Indian market. International events will determine the market's direction in the coming days.
