The sell-off in the Indian stock market deepened further in Wednesday’s session, with key benchmarks falling over 1.5% as investors fled risky assets amid the ongoing conflict in the Middle East, which entered its fifth day and widened further, leaving the Street worried about its ripple effects on the domestic economy.
The Nifty 50 closed 1.55% lower at 24,480, while the Sensex lost 1122 points, or 1.40%, to settle at 79,116. Both indices have declined over 1% for the third consecutive session. At one point during the day, the benchmarks had plunged more than 2%.
The broader markets also faced similar losses, with the Nifty Midcap 100 and the Nifty Smallcap 100 indices falling over 2% each.
Crude oil prices have risen for the fourth straight day, with Brent crude futures topping $84 per barrel on fears of supply disruptions after Iran reportedly closed the Strait of Hormuz — a key route that accounts for about 20% of global oil and LNG trade.
Investors were cautioned about the impact of higher crude prices on the economy, as they could stoke inflation and potentially widen the trade deficit. If prices remain elevated for a prolonged period, they could also weigh on corporate earnings.
(more to come)