Stock markets drop in early trade; rupee falls to record low of 95.63
Market sentiments remained dominated by fears that the 10-week-old conflict could further tighten global supply
Equity benchmark indices tumbled in early trade on Tuesday (May 12) amid rising crude oil prices as uncertainty surrounding the West Asia conflict clouded markets’ confidence.
Unabated foreign fund outflows also dragged the markets lower.
On the other hand, the rupee depreciated 35 paise to a record low of 95.63 against the US dollar in early trade.
Fear dominates market
Market sentiments remained dominated by fears that the 10-week-old conflict could further tighten global supply, particularly after Trump rejected Tehran's latest response to a US-backed peace proposal, calling it totally unacceptable.
The 30-share BSE Sensex fell by 525.44 points to 75,489.84 in early trade. The 50-share NSE Nifty dropped 164.5 points to 23,651.35.
From the 30-Sensex firms, Tata Consultancy Services, Infosys, Tech Mahindra, HCL Tech, Adani Ports and Bajaj Finserv were among the major laggards.
Bharti Airtel and NTPC were the winners.
Brent crude, the global oil benchmark, traded 0.93 per cent higher at USD 105.2 per barrel.
“The ongoing US-Iran conflict continues to weigh on global sentiment, keeping risk appetite subdued across financial markets and resulting in heightened headline-driven volatility across equities and commodities. Investors remain wary as uncertainty surrounding the duration and potential outcome of the conflict continues to cloud market confidence,” Ponmudi R, CEO of Enrich Money, an online trading and wealth-tech firm, said.
FIIs continue to pull
US President Donald Trump on Monday said the ceasefire with Iran was at its “weakest” and on “massive life support”, a day after he rejected Tehran’s proposal to end the months-long war as “totally unacceptable”.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 8,437.56 crore on Monday, according to exchange data.
On Monday, the BSE benchmark tanked 1,312.91 points or 1.70 per cent to settle at 76,015.28. The Nifty dropped 360.30 points or 1.49 per cent to end at 23,815.85.
(With agency inputs)