The benchmark Sensex of the Bombay Stock Exchange on Monday tumbled 478 points, or 2.7%, its biggest fall in five months, at 17446, as high oil prices arising from tensions over Iran’s nuclear programme triggered fresh worries about inflation and high interest rates.
The Nifty of the National Stock Exchange also dropped 148.10 points, or 2.7%, to 5,281.
“Concerns on high oil prices coupled with uncertainty surrounding the Uttar Pradesh elections led to correction,” said Sudip Bandyopadhyay, managing director and chief executive officer, Destimoney Securities.
In london, brent crude touched a 10-months high of $126 a barrel as tensions over Iran’s nuclear programme raised fears of supply disruptions. India imports over 80% of its crude oil requirements.
Major Asian and European markets were also down by up to 1%.
“Going ahead, advance tax payments in mid-march of close to Rs 50000-60000 crore may further exert pressure on liquidity,” said DK Aggarwal, chairman and MD, SMC Investments and Advisors. “The correction in the markets is actually providing good opportunity to investors who were left behind in the recent rally.”