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Middle East Tensions Sink Indian Stocks
13 Jul
Summary
- Indian stock indices Sensex and Nifty declined sharply.
- Rising oil prices and Middle East conflict impacted sentiment.
- Broader markets and major company shares also fell.
Indian stock markets, including the benchmark Sensex and Nifty, experienced a notable downturn on Monday. The declines were primarily driven by heightened geopolitical tensions in the Middle East and a subsequent surge in oil prices. Investors also reacted to broader global market weaknesses.
The Sensex fell by approximately 712 points, while the Nifty 50 saw a drop of 207 points. This significant sell-off resulted in a loss of over Rs 2 lakh crore in investor wealth, reducing the total market capitalization on the BSE. Key companies across various sectors witnessed a decline in their share prices.
Several factors contributed to the negative sentiment on Dalal Street. The escalation of the Iran-US conflict, with Iran striking Gulf states and the US responding, raised concerns. This, coupled with oil prices nearing $80 per barrel due to the closure of the Strait of Hormuz, impacted India's trade balance outlook. The Indian Rupee also opened lower against the dollar.
Furthermore, rising US Treasury yields and weak global cues, with major Asian markets like South Korea and Japan experiencing significant drops, added to the bearish trend. While Nifty IT stocks managed to buck the trend with gains, sectors like Auto, Financial Services, and Metal saw considerable losses.
