Stock markets fall sharply amid surge in global crude oil prices

Benchmark indices Sensex and Nifty declined sharply in early trade as Brent crude crossed the USD 100 mark amid escalating tensions in West Asia. Rising oil prices, foreign fund outflows and weak global cues weighed heavily on investor sentiment

Mumbai: Market benchmark indices Sensex and Nifty tumbled in early trade on Friday as crude oil prices crossed the USD 100 per barrel mark amid escalating geopolitical tensions in West Asia.

The 30-share BSE Sensex tumbled 512.07 points to 75,869.38 during initial trade. The 50-share NSE Nifty declined 153 points to 23,713.60.

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From the Sensex pack, InterGlobe Aviation, Eternal, Bharti Airtel, Infosys, Bajaj Finance and Trent were among the major laggards.

InterGlobe Aviation slipped over 2 per cent after IndiGo reported a net loss of Rs 238 crore for the three months ended June, as higher fuel prices and the West Asia conflict resulted in turbulence for the country’s largest airline. InterGlobe Aviation is the parent company of IndiGo.

IT services company Infosys declined over 1 per cent after it lowered the upper end of its full-year revenue growth forecast to between 1.5 per cent and 3 per cent amid continued macroeconomic uncertainty.

HCL Tech, Tech Mahindra, Tata Consultancy Services and Sun Pharma were the gainers.

Brent crude, the global oil benchmark, was trading 0.03 per cent lower at USD 100.7 per barrel.

“The total uncertainty and high volatility in markets continue without any signs of immediate respite. The attack on Saudi tankers by the Iran-backed Houthis in the Red Sea is the main reason for the recent sharp spike in Brent crude to about USD 100. Such a high price is bound to revive India’s balance of payments concerns,” VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 2,999.23 crore on Thursday, according to exchange data.

In Asian markets, South Korea’s KOSPI tanked 5.56 per cent. Japan’s Nikkei 225 index, Shanghai’s SSE Composite index and Hong Kong’s Hang Seng index were also trading lower.

US markets ended lower on Thursday.

On Thursday, the Sensex declined 363.66 points, or 0.47 per cent, to settle at 76,391.39. The Nifty dipped 126.65 points, or 0.53 per cent, to close at 23,869.60.