The Nifty and the Sensex declined nearly 0.5% at close today and over 2.5% for the week as investors tracked the escalation in the US-Iran conflict and the surge in crude oil prices. Stock markets have witnessed five straight sessions of decline and investor wealth of over Rs 9 lakh cr has been wiped out this week. The Indian rupee closed flat at 96.56 to the dollar vs Thursday’s close of 96.57 to the dollar. Almost all sectoral indices faced pressure, in particular the oil-sensitive ones.
Shares of InterGlobe Aviation, Eternal, Bharti Airtel, Infosys, Bajaj Finance and Trent were among the major laggards. InterGlobe Aviation slipped over 2 percent after IndiGo reported a Rs 238 crore net loss for the three months ended June. IT services company Infosys declined over 1 percent after it tempered the upper end of its full-year revenue forecast to between 1.5 percent and 3 percent amid continued macroeconomic uncertainty. HCL Tech, Tech Mahindra, Tata Consultancy Services and Sun Pharma gained in trade. “The total uncertainty and high volatility in markets continues 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. Such a high price is bound to revive India’s Balance of Payments concerns,” VK Vijayakumar, Chief Investment Strategist, Geojit Investments said.
Independent market analyst, Ambareesh Baliga told Times Now Digital, “the key factor for this in the stock market is the escalation of the US-Iran war, the Red Sea crisis, crude oil prices spiking and rupee weakening despite FCNR inflows.”
G. Chokkalingam Head of Research at Equinomics Research told Times Now Digital, “the reason for the massive decline in stock markets is the renewed aggressive attacks by the US on Iran; the spurt in oil prices, Brent Crude $100 mark a barrel and over 17% deficit in cumulative rainfall so far. If global pressures on US emerge by this weekend and there is a possible halt to the attacks, then stock markets will revive next week.