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Markets stay on crash course; crude oil prices surge to highest level since 2008

Sectorally, the Nifty Bank and Auto fell 4% each, and the realty index fell 5.5% on Monday.

From their peak in October, markets have corrected more than 14% amid negative global cues and relentless selling by foreign portfolio investors (FPIs).

By Ruchit Purohit & Yoosef KP

Market indices nosedived on Monday amid concerns over the economic cost of the ongoing war in Ukraine, which saw crude oil prices hitting their highest level since 2008. The Sensex slipped below 53,000 levels, while the Nifty broke its important support level of 16,000 during the day. Finance stocks and Reliance Industries (RIL) led the fall.

From their peak in October, markets have corrected more than 14% amid negative global cues and relentless selling by foreign portfolio investors (FPIs). In the last four trading sessions, FPIs have sold shares worth Rs 26,096.69 crore, provisional data on bourses showed. So far in 2022, the Sensex has declined 12.4% in dollar terms against 3.3% gains clocked by Jakarta Composite. While Shanghai Composite has come off 6.8%, Taiwan TAIEX has fallen 7.7% during the same period. South Korea, which has an oil imports bill similar to that of India, has also plunged 13.7% between January and now.

After plunging as much as 1,966 points in intra-day trade on Monday, the Sensex recouped some of its losses to close at 52,842.75, down 1,491.06 points or 2.7%. The Nifty-50 ended lower by 382.20 points or 2.4% at 15,863.15. “The short-term trend of Nifty continues to be weak. The last hour upside recovery of Monday could bring some hopes of a pullback rally in the short term. A sustainable upside bounce is expected from there or from the lows of 15700-15500 levels in the next few sessions,” Nagaraj Shetti, technical research analyst at HDFC Securities, said.

The broader markets also fell in line with the benchmark indices as both BSE mid-cap and small-cap indices fell 2.3% each.

Sectorally, the Nifty Bank and Auto fell 4% each, and the realty index fell 5.5% on Monday.

Pankaj Pandey, head of research, ICICIdirect, said, “Global as well as Indian equities continue to witness correction amid the ongoing Russia-Ukraine conflict and concerns over economic costs of war and subsequent sanctions on global economies with the key concern right now being a sharp rise in the crude prices.”

Bullion prices continued to strengthen with gold crossing $2,000 per ounce for the first time since August 2020. Silver prices in the domestic markets also surpassed Rs 71,200 on Monday.

Among the Sensex stocks, IndusInd Bank was the top loser, falling 7.6%, followed by Axis Bank, Maruti Suzuki, and Bajaj twins, each falling anywhere between 6.3% and 6.7%. On the other hand, Bharti Airtel, HCL Tech, Tata Steel and Infosys ended in the green.

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