Nifty closes below 23,500, Sensex falls over 1% as Brent crude crosses USD 100 per barrel

Indian equity markets experienced a decline on Wednesday as Brent crude oil prices surpassed USD 100 per barrel, fueling concerns regarding inflation and economic growth. During the trading session, the Nifty 50 index reached a three-month low.

The Nifty 50 index closed at 23,431.50, marking a decrease of 203.60 points, or 0.86 percent. The BSE Sensex fell by 813.35 points, or 1.08 percent, to close at 74,764.23. Brent crude oil prices rose by 2.72 percent during the reporting period.

Vinod Nair, Head of Research at Geojit Investments, stated that markets are increasingly accounting for a prolonged conflict in the Middle East, which may keep crude oil prices elevated. Nair noted that persistent geopolitical uncertainty complicates the ability of central banks to balance growth and inflation, while higher energy costs present risks to price stability and economic activity.

Most sectoral indices on the National Stock Exchange (NSE) ended the day lower. The Nifty IT index led the declines with a 3.38 percent drop, followed by Nifty Realty at 1.88 percent. Other sectors, including FMCG, Pharma, Media, Private Bank, and Auto, also saw losses. The Nifty Metal index was the only major sectoral gainer, rising 1.67 percent.

Among the Nifty 50 constituents, Adani Enterprises, Max Health, Adani Ports, and Coal India were the top gainers. Infosys, HCL Tech, Tech Mahindra, HDFC Life, and Wipro recorded the largest losses.

Riyank Arora, Associate Vice President at Hedged.in, characterized the market movement as routine profit booking rather than a fundamental shift in the broader trend, provided that key support levels remain intact. He suggested that a buy-on-dips strategy for quality stocks remains appropriate.

In other markets, gold prices increased by 0.33 percent to Rs 1,53,080 per 10 grams for 24 karats, while silver prices rose 0.22 percent to Rs 2,39,884 per kilogram. Asian markets showed mixed results, with the KOSPI in South Korea and the Weighted Index in Taiwan posting gains, while the Nikkei 225 in Japan, the Straits Times in Singapore, and the Hang Seng in Hong Kong closed lower.

Article source: hongkongherald.com | Image credit: Moneycontrol.com