share market
Wednesday brought huge disappointment for the investors of the Indian stock market. The sudden increase in military tension between America and Iran sent crude oil prices so high that the Indian stock market fell face down. In the international market, Brent crude jumped beyond $ 76 per barrel. This one news pushed the Sensex down by more than 600 points. The worst hit has been those companies which are directly related to crude oil. Heavy selling was seen in the shares of airline companies, oil marketing companies (OMCs) selling petrol and diesel and paint manufacturing companies.
Huge fall in the shares of these big companies
The cost of crude oil has a direct impact on the cost of airline fuel (ATF) and raw materials for making paint. This is the reason why investors sold the shares of InterGlobe Aviation (IndiGo) heavily on Wednesday.
- IndiGo shares closed at Rs 5,281.20 with a dive of 2.14 per cent. It had also slipped to a low of Rs 5,228.85 in the day’s trading.
- On the other hand, SpiceJet shares also remained sluggish, falling 1.04 percent to Rs 11.41.
- BPCL shares fell to Rs 301.80 with a huge loss of 3.87 percent.
- Similarly, investors of HPCL also got a big blow, where the share fell by 4.13 percent to Rs 389.20.
- Due to fear of increase in the cost of raw materials, the paint sector’s leading stock Asian Paints also surrendered, which was seen trading at Rs 2,689.90 with a weakness of 1.52 per cent.
Why did crude oil prices rise?
The real root of this decline in the stock market is the new controversy erupting in West Asia. America has adopted a tough stance after the recent attacks on merchant ships in the Strait of Hormuz. In retaliation, the US Army has carried out military attacks on more than 80 targets inside Iran. This action has created a war-like situation in the entire Middle East.
Iran has also warned of giving a strong response to this attack. Continuous news of missile and drone attacks has created fear of disruption in oil supply across the world. Due to this fear, a sharp rise of about 3 percent was recorded in the prices of Brent crude. The situation worsened when America withdrew the sanctions exemption given to Iran for selling oil with immediate effect. Now due to the fear of reduced supply of crude oil in the global market, prices have started skyrocketing, due to which the Indian stock market is suffering the direct consequences.
Experts’ opinion on the current market situation
Market experts are keeping a close eye on this entire situation. In a recent report by Bloomberg, Caroline Kissane, Associate Dean of the Center for Global Affairs of New York University, has expressed her opinion. He believes that if this military tension does not escalate, then the current surge in crude oil prices will not last long. This means that once the situation calms down, the market may bounce back soon.
On the other hand, in the context of the Indian market, Dr. V.K., Chief Investment Strategist of Geojit Investments. Vijayakumar has expressed concern. He says that this sudden increase in tension between America and Iran has spoiled the mathematics of the market. Brent crude crossing 76 dollars is a big alarm bell, which has once again pushed the stock market into a whirlpool of great uncertainty.
Disclaimer: This article is for information only and should not be considered as investment advice in any way. TV9 Bharatvarsha advises its readers and viewers to consult their financial advisors before taking any money-related decisions.
