Daijiworld Media Network – New Delhi
New Delhi, Mar 9: Benchmark stock market indices plunged in early trade on Monday as rising crude oil prices triggered by the escalating conflict involving Iran, Israel and the United States weighed heavily on investor sentiment.
The BSE Sensex dropped 2,444.51 points to 76,474.39, while the Nifty 50 fell 729.90 points to 23,720.55 as of 9:28 a.m., reflecting a sharp selloff on Dalal Street.
Dr. V. K. Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said Brent Crude prices had surged above $115 per barrel, delivering a major oil shock to global economies and markets.
“Big oil importers like India will be hit hard if the West Asian conflict lingers and crude prices remain high. The market will price in the economic consequences of this oil shock.
Inflation will certainly move up whether the oil price hike is passed on to consumers or not,” he said.
At the opening bell, markets witnessed heavy selling across most sectors. Among major stocks, Reliance Industries was among the least impacted, slipping 0.04%. Infosys declined 0.89%, while Sun Pharmaceutical Industries fell 1%. Tech Mahindra dropped 1.01% and HCL Technologies was down 1.03%.
On the losing side, IndusInd Bank recorded the steepest fall, tumbling 7.55%. State Bank of India declined 5.56%, Larsen & Toubro fell 4.87%, Tata Steel slipped 4.61%, and Maruti Suzuki India dropped 4.55%.
Vijayakumar noted that uncertainty over the duration of the conflict could also affect foreign investment flows.
“Foreign institutional investors have again turned aggressive sellers in India after a short bout of buying in February. The unknown factor now is how long the conflict will last,” he said.
Market volatility rose sharply, with India VIX jumping 21.52%. In the broader market, the Nifty Midcap 100 fell 3.04%, while the Nifty Smallcap 100 declined 3.06%.
Most sectoral indices were in the red. Nifty Auto dropped 3.89%, Nifty Financial Services fell 3.66%, Nifty FMCG declined 2.19%, and Nifty IT slipped 1.26%. Other sectors such as metal, media, realty, consumer durables and oil & gas also posted significant losses.
However, Vijayakumar noted that domestic consumption sectors like banking, automobiles, telecom and cement may remain relatively stable, while defence and pharmaceutical stocks could show resilience.
“Long-term investors with high risk appetite can gradually buy stocks in these strong themes,” he added.