Indian benchmark indices Sensex and Nifty saw a sharp fall on Monday, extending a seven-week losing streak. At 11:05 am, Sensex stood at around 72,888, over 1,007 points or 1.36 per cent down.
The Nifty 50 fell 1.16 per cent to 22,823 — 317 points or 1.37 per cent down — at the same time on Monday. The shares fell to near six-month lows.
The fall comes after the Sensex and Nifty gained on Friday. The Sensex climbed 315.20 points, or 0.43 per cent, to settle at 73,895.74, while the Nifty rose 77.40 points, or 0.34 per cent, to end at 23,140.50.
Why is market down?
All 30 Sensex constituents were trading primarily in the red, with Bajaj Finance, Kotak Mahindra Bank, HDFC Bank, Bajaj Finserv, Hindustan Unilever, Mahindra & Mahindra, Larsen & Toubro and Bharat Electronics among the major laggards.
A key pressure point for Indian equities was the sharp rise in crude oil prices. Brent crude, the global oil benchmark, was trading over three per cent higher at $107.8 per barrel.
Higher oil prices are a concern for India, the world's third-largest crude oil importer, as they can increase the import bill and add to inflationary pressures.
{{/usCountry}}Higher oil prices are a concern for India, the world's third-largest crude oil importer, as they can increase the import bill and add to inflationary pressures.
{{/usCountry}}Oil rose as Iran said it wouldn’t soften its conditions to reopen the Strait of Hormuz after President Donald Trump rejected its proposal to do so, fading hopes of any recovery of traffic through the crucial waterway.
"Indian equity markets are likely to remain cautious as renewed geopolitical uncertainty and a rebound in crude oil prices weigh on investor sentiment. The rejection by US President Donald Trump of Iran's proposal to resolve the conflict and reopen the Strait of Hormuz has revived concerns over prolonged supply disruptions, making oil prices the dominant factor for global markets," PTI news agency quoted as saying Ponmudi R, CEO of Enrich Money, an online trading and wealth-tech firm.
The geopolitical concerns also weighed on Asian markets. South Korea's KOSPI, Japan's Nikkei 225 and Shanghai's SSE Composite traded lower, while Hong Kong's Hang Seng index quoted higher. US markets, however, ended in positive territory on Friday.
Foreign institutional investors (FIIs) also remained sellers, offloading equities worth ₹3,693.93 crore on Friday, according to exchange data.