Indian stock markets opened sharply lower on Thursday, extending the previous session’s losses as rising crude oil prices and renewed global trade tensions dampened investor sentiment.
The BSE Sensex fell 992.53 points to 75,871.18 in early trade, while the Nifty fell 310.55 points to 23,556.30.
As of 9:18 AM EST, the Nifty 50 index was down 1.13 per cent at 23,596.2, while the Sensex was down 1.23 per cent at 75,921.04, reflecting broad selling across sectors.
All 16 major sector indices opened in the red, with broader markets also under pressure. The small and medium enterprise indices fell by 1.5 percent and 1.3 percent, respectively.
This sharp decline came as global oil prices rose to more than $100 per barrel amid escalating tensions in West Asia. Iraqi security officials said that Iranian boats loaded with explosives hit two tankers loaded with fuel oil, exacerbating supply disruptions linked to the ongoing US-Israeli war on Iran. The officials added that oil ports “completely suspended their operations,” raising fears of a supply crisis.
High crude oil prices usually affect oil-importing economies such as India by raising inflation and expanding the country’s import bill.
Investor sentiment was also hit after the US opened new unfair trade investigations in 16 countries, including India, in a move seen as a revival of tariff pressures linked to US President Donald Trump’s trade policies.
The rupee depreciates further
Indian assets fell on Thursday and the rupee fell to a record low, as a fresh rise in crude oil prices stoked concerns about the economic impact from energy supply disruptions even as central bank intervention mitigated the currency’s decline.
Brent crude prices rose to $100 a barrel as Iran escalated its attacks on oil and transportation facilities across the Middle East, warning the world to prepare for oil to reach $200 a barrel.
The rupee fell 0.3% to 92.3575, surpassing its all-time low of 92.3475 recorded earlier in the week.
Asian currencies fell across the board, while the MSCI regional equity index fell more than 1.5%.
“We expect the RBI to intervene in the 92.30-92.35 region. But if Brent continues to stay higher for a few sessions, the RBI may have to give up on the rupee,” said Abhishek Goenka, CEO of foreign exchange consultancy IFA Global.
