Stock markets drop in early trade amid US-Iran clash, rising oil prices
BSE Sensex declined 358.54 points to 73,624.64 in early trade. NSE Nifty dropped 117 points to 23,098.30
Mumbai, Jun 11 (PTI) Stock market benchmark indices Sensex and Nifty declined in early deals on Thursday, tracking weak trends in global equities and rising crude oil prices amid escalating tensions between the US and Iran.
Unabated foreign fund outflows and a spike in US inflation also dented markets' sentiment, according to market analysts.
The 30-share BSE Sensex declined 358.54 points to 73,624.64 in early trade. The 50-share NSE Nifty dropped 117 points to 23,098.30.
From the 30-Sensex firms, HCL Tech, Infosys, Tech Mahindra, Tata Consultancy Services, Eternal and Trent were among the laggards.
Power Grid, ICICI Bank, Bharti Airtel and InterGlobe Aviation were among the winners.
Brent crude, the global oil benchmark, traded 1.70 per cent higher at USD 94.68 per barrel.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 2,124.98 crore on Wednesday, according to exchange data.
"Fresh military action by the United States against Iranian targets has reignited concerns over the stability of the Middle East, raising fears that recent diplomatic efforts may be losing momentum and increasing the risk of a broader regional conflict," Ponmudi R, CEO of Enrich Money, an online trading and wealth-tech firm, said.
Adding to the cautious mood, the latest US inflation data, while broadly in line with market expectations, showed consumer prices rising to their highest level in three years, he added.
In Asian markets, South Korea's Kospi, Japan's Nikkei 225 index, Shanghai's SSE Composite index and Hong Kong's Hang Seng index quoted lower.
US markets ended significantly lower on Wednesday.
"Wall Street witnessed a sharp correction overnight, with the Dow Jones falling over 950 points. The weakness was broad-based as investors moved away from risk assets amid fears that escalating geopolitical tensions could disrupt energy markets and keep inflationary pressures elevated," Hariprasad K, Research Analyst and Founder, Livelong Wealth, said.
Asian markets are reflecting a similar sentiment this morning, he said.
"For Indian markets, the biggest concern remains crude oil. Rising oil prices not only threaten India's inflation trajectory but also add pressure on the fiscal balance, corporate margins and the rupee," Hariprasad added.
On Wednesday, the Sensex trimmed most of its intraday gains during the fag-end of trading and settled 64.42 points, or 0.09 per cent, higher at 73,983.18. The Nifty, however, dipped 27.15 points, or 0.12 per cent, to end at 23,214.95. PTI