Sensex tanks nearly 1,800 points: What's behind today's crash?
What's the story
India's benchmark stock indices opened in the red on Thursday, following fresh escalations in the Middle East conflict. The Sensex plummeted by a staggering 1,770 points or 2.3% to trade at 74,933 while the Nifty50 lost 536 points to trade at 23,239. The decline is largely attributed to rising crude oil prices amid ongoing geopolitical tensions in the region.
Market impact
Israel's attack on Iran worsens Middle East conflict
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said the uncertainty surrounding the war has worsened with world's largest LNG plant in Qatar damaged after Iran attack. Brent crude oil prices have surged to $111 per barrel. "This is bad news for oil and gas importers like India," he said, adding that if Brent stays above $110 for a prolonged period, it could negatively impact India's macroeconomic indicators.
Stock performance
HDFC Bank top loser in early trade
Post opening bell, NTPC Ltd was the only stock in green among early movers with a marginal gain of 0.29%. HDFC Bank Ltd witnessed the steepest fall with a decline of 7% after its chairman suddenly resigned over ethical concerns. Other major companies such as Larsen and Toubro Ltd, Bajaj Finance Ltd, Axis Bank Ltd and Mahindra & Mahindra Ltd also witnessed declines of up to 3.33%, 2.82%, 2.71%, and 2.62%, respectively, in early trade today amid these market conditions.
War impact
'Recent recovery likely to be wiped out'
Vijayakumar further noted that a prolonged war is not in anyone's interest and a sudden end bringing crude prices sharply down cannot be ruled out. He said the market has been extremely volatile reacting to developments on the war front and crude prices. "Last three days of recovery in the market is likely to be wiped out if the war escalation continues," he added. Sensex had gained 2,700 points in the last three trading sessions.