Equity benchmarks Sensex and Nifty tumbled nearly 3 per cent in opening trade on Monday (March 7) tracking weak global markets and elevated oil prices amid the Russia-Ukraine conflict.
Extending its downtrend for the fourth straight session on Monday, the 30-share BSE Sensex opened on a weak note and slumped 1,620.73 points or 2.98 per cent to 52,713.08.
Similarly, the broader NSE Nifty tanked 447.05 points or 2.75 per cent and slipped below the 16,000 level to 15,798.30.
Sensex tanked 1,453.51 points to 52,880.30 in opening trade, while the Nifty plunged over 400 points to 15,831.85. Mid-and small-cap shares were trading in the negative zone as Nifty Midcap 100 index slipped 2.62 per cent up and small-cap shares shed 2.41 per cent.
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From the 30-share pack, Maruti Suzuki, Bajaj Finance, Mahindra & Mahindra, UltraTech Cement, Larsen & Toubro and ICICI Bank were the biggest drag, tumbling up to 6.3 per cent. In contrast, Tata Steel was trading in the green.
In the previous trade, the 30-share BSE benchmark ended at 54,333.81, down by 768.87 points or 1.40 per cent. The NSE Nifty slumped 252.70 points or 1.53 per cent to end at 16,245.35.
Bourses in Hong Kong, Shanghai and Tokyo were trading significantly lower in mid-session deals. Stock exchanges in the US closed in the negative zone on Friday.
Meanwhile, international oil benchmark Brent crude surged 8.84 per cent to USD 128.6 a barrel. Foreign institutional investors continued their selling spree in Indian markets as they offloaded shares worth Rs 7,631.02 crore on a net basis on Friday, according to exchange data.
“This week’s focus will be on the Russia-Ukraine conflict and its impact on oil prices. On the home front, investors will be watching the outcome of the state elections in five states on March 10,” according to Mohit Nigam, Head – PMS, Hem Securities.
It is strongly felt that rising global fuel prices would reflect on domestic fuel prices following election results on March 10. To minimise impact on consumers, the government may have to cut excise duty on fuel.
Kotak Institutional Equities stated that the government will not bear any LPG subsidy henceforth. A Rs 10 per litre cut in excise duty on diesel and petrol may cost the exchequer $20 billion. Additionally, the government may have to increase minimum support price (MSP) of crops significantly to support farmers reeling under rising input costs, as per a report of the Kotak Institutional Equities.