Sensex tanks 900 points: Key reasons behind today's decline
What's the story
India's benchmark equity indices opened sharply lower today, marking the fifth consecutive session of losses. The fall is largely attributed to Brent crude oil prices surging past the $100-a-barrel mark amid rising tensions in the Middle East. Weak June-quarter earnings from Infosys and IndiGo, along with overnight losses on Wall Street, have further dampened investor sentiment. At around 10:15 am, the Sensex was down 890 points to 75,502 while Nifty50 fell 257 points to trade at around 23,611.
Market impact
Surge in crude oil prices raises inflation concerns
Brent crude oil prices have skyrocketed to $100.64 per barrel, with WTI crude at $91.99.
The spike in oil prices has raised concerns over rising inflation, India's import bill, and corporate profit margins.
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said the sudden rise in oil prices poses a major macro risk for Indian markets and could revive India's Balance of Payments concerns.
Earnings report
Poor earnings from key players weigh on market
The disappointing June-quarter earnings from Infosys and IndiGo have also weighed on the markets.
Infosys was the biggest loser among Sensex stocks, falling 1.5%, while IndiGo declined after reporting weaker-than-expected quarterly results.
The weakness spread across the market with several indices witnessing a decline in their respective values today morning.
Market performance
Sectoral indices and global cues
The Nifty Auto index fell by 0.96%, Realty by 1.33%, Consumer Durables by 1.09%, Metal by 0.88%, and Oil & Gas by 0.85%. However, the Nifty IT index rose slightly by 0.23%.
The broader market also traded weak with the Nifty Smallcap100 declining by 0.83% and Midcap100 by 0.78%.
Japan's Nikkei tumbled nearly 3%, South Korea's Kospi fell around 5%, while broader MSCI Asia-Pacific index outside Japan declined about 1% today morning.