Sensex plunges 700 points as rising crude oil prices and global tensions hit Dalal Street (Img: Pinterest)
Mumbai: The Indian stock market witnessed a sharp decline on Friday, as benchmark indices opened on a weak note amid rising global tensions and a surge in crude oil prices.
The Sensex plunged over 700 points, while the Nifty slipped more than 200 points in early trade as investors reacted to escalating US-Iran tensions and Brent crude prices crossing the $108 per barrel mark.
The 30-share BSE Sensex opened 700 points lower at 74,309.16, falling more than 1 per cent during early trading.
The Nifty 50 opened at 23,270.30, declining over 200 points from its previous close.
Most sectoral indices traded in the red, with sharp selling pressure seen across banking, auto, metal and energy stocks. The IT sector remained among the few areas showing some resilience.
The biggest concern for investors remained the sharp rise in crude oil prices. Brent crude crossed $108 per barrel amid increasing tensions between the United States and Iran.
Higher crude prices could increase India's import bill and put pressure on inflation, currency movement and corporate earnings.
The Indian rupee also weakened in early trade, opening at 95.69 against the US dollar, compared with Thursday’s close of 95.44.
G. Chokkalingam, Head of Research at Equinomics Research, said domestic markets could remain under pressure due to high oil prices, weak rainfall conditions and increased IPO activity.
According to market experts, Indian equities may see recovery if global diplomatic efforts help reduce tensions between the US and Iran and bring crude prices down.
However, without any improvement on the geopolitical front, volatility may continue throughout September.
The market had shown a marginal recovery in the previous trading session after three consecutive sessions of losses.
The Sensex gained 138.36 points, or 0.19 per cent, to close at 74,902.59, while the Nifty rose 46.30 points, or 0.20 per cent, to settle at 23,477.80.
Analysts said selective buying in financial and oil-related stocks helped indices recover despite weak global signals.
With uncertainty rising across global markets, investors are expected to remain cautious in the coming sessions.
