Sensex settles 800 pts lower, Nifty ends below 23,650: Surging crude prices among key factors behind market decline

Stock market today news: Sensex, Nifty see profit booking in trade.

• Sensex and Nifty fell over 1 percent amid rising crude prices.
• Mahindra & Mahindra, Tata Motors among top losers.
• Rupee weakened to 92.32 against the US dollar.

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The benchmark equity indices Sensex and Nifty extended losses on Thursday, tracking a sharp rise in crude oil prices amid escalating tensions in West Asia and renewed global trade concerns.

The Sensex settled 829.29 points or 1.08 percent lower at 76,034.42, while the broader Nifty slipped to 23,639.15, down 227.70 points or 0.95 percent.

Among the major laggards in the Nifty pack were Mahindra & Mahindra, Tata Motors Passenger Vehicles and Eternal, which declined up to 4.5 percent. Meanwhile, Reliance Industries and Coal India were the only gainers, rising up to 0.2 percent. Market breadth remained negative with about 843 shares advancing, 2,388 declining and 179 remaining unchanged.

Shares of online food delivery companies were under pressure. Swiggy fell 2.2 percent, while Eternal dropped 3 percent. According to brokerage Motilal Oswal Financial Services, a continued shortage of commercial LPG due to the West Asia conflict through the remainder of March could lead to a temporary decline in order volumes for the companies.

Fourteen of the 16 major sectoral indices were trading in the red. The broader Nifty Smallcap 100 and Nifty Midcap 100 also declined up to 1.5 percent.

Key factors behind the decline

1) Rising crude prices: Global benchmark Brent crude surged 8.98 percent to USD 100.24 per barrel. Oil prices rose above the USD 100 mark after Iraqi security officials said Iranian explosive-laden boats had struck two fuel-oil tankers, amid wider supply disruptions linked to the U.S.-Israeli war on Iran. Officials also said oil ports had completely stopped operations. Higher oil prices are seen as negative for oil-importing countries like India as they increase inflationary pressures and widen the import bill.

2) Trade worries: The administration of US President Donald Trump has initiated a fresh trade investigation targeting excess industrial capacity in 16 major trading partners, including India, China and the European Union. The move is aimed at rebuilding tariff pressure after a ruling by the Supreme Court of the United States struck down a key element of Trump’s tariff programme.

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3) India VIX rises: The market’s fear gauge, India VIX, jumped about 6 percent to 22.32.

4) Rupee weakens: The Indian Rupee depreciated 31 paise to 92.32 against the U.S. dollar in early trade, pressured by foreign fund outflows, rising crude oil prices and a stronger greenback as tensions in West Asia persisted. At the interbank foreign exchange market, the rupee opened at 92.25 against the U.S. dollar and slipped further to 92.32, down 31 paise from its previous close.

5) Weak global cues: In Asian markets, Japan’s Nikkei 225, South Korea’s Kospi, China’s Shanghai Composite and Hong Kong’s Hang Seng Index were trading lower. U.S. markets ended mostly lower on Wednesday.

6) FII selling: Foreign institutional investors (FIIs) sold equities worth Rs 6,267.31 crore on Wednesday. FIIs have remained net sellers so far in March and have offloaded more than Rs 39,000 crore in the past seven sessions.

Technical outlook

Anand James, Chief Market Strategist at Geojit Investments, said the sharp fall in the previous session could allow recovery attempts early in the day. However, he added that failure to move above 23,990 or a direct fall below Monday’s reaction low of 23,697 may open the door for further downside towards the 23,550–23,370 zone.

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