Indian stock market ended the session in the red on Wednesday as the key equity indices closed lower. Market experts attribute the recent losing momentum in equities to elevated crude prices, caution around FOMC data and escalating tension in the Middle East.
Sensex Down For 4th Day
Sensex, the 30-share index of BSE, settled 325.78 points, or 0.42 per cent, lower at 6,909.68, registering a decline for the fourth consecutive day.
The key benchmark declined over 1,170 points, or 1.49 per cent, during the past four sessions.
Nifty Continues Losing Momentum For 7th Day
On the other hand, Nifty 50, the 50-share index of the NSE, declined for the seventh consecutive session. The index closed 76.60 points, or 0.32 per cent, lower at 24,078.30.
Meanwhile, in the last seven sessions, the 50-share index tumbled 505 points, or 2 per cent.
What Are Pulling Back Market Momentum?
According to experts, elevated crude oil prices coupled with a lack of a diplomatic resolution for the Middle East war and cautious investors’ sentiment are the key drivers of market sentiment for the past few sessions.
“Markets turned cautious ahead of the release of the U.S. FOMC minutes, as investors remained concerned that the Federal Reserve’s battle against inflation may continue. The lack of a diplomatic resolution following the end of the U.S.-Iran ceasefire kept crude oil prices and bond yields elevated, strengthening risk-off sentiment,” said Vinod Nair, Head of Research, Geojit Investments Limited.
According to Hariselvan Radhakrishnan, Founder & CEO of HST Wealth, the broader market mood remains firmly cautious.
“Elevated crude oil prices, rising global bond yields and persistent geopolitical tensions continue to dominate investor sentiment, with external developments driving market direction,” he added.
Market Performance Today
Top Losers: Power Grid, Bajaj Finance, L&T, ITC, Hindustan Unilever and Reliance were among the top losers from the Sensex basket. On the other hand, HCL Tech, Eternal, Kotak Mahindra Bank traded higher.
Conclusion
As per my observation, rapid fluctuation in Crude oil prices in the international market has been a deciding force for Indian equities for the past many months. The newly introduced closing auction system (CAS) has also been a driver of volatility for the past two weeks.
The massive decline in Asian stock markets is also weighing on Indian equity sentiment. Last seen, Brent crude, the global oil benchmark, was trading at level of $92 per barrel.