Indian Markets Plummet to Six-Month Lows Amid Crude Price Surge

The Indian stock market plummeted on Monday, with both the Sensex and Nifty indices sliding to near six-month lows. The Sensex dropped by nearly 1,000 points, or 1.31 percent, while the Nifty fell below 22,850. This decline marks the seventh consecutive week of losses for the two major equity benchmarks.

The downturn is attributed to several factors, including a surge in crude oil prices. Brent crude, the global benchmark, rose by 2.27 percent to USD 106.7 per barrel after US President Donald Trump rejected an Iranian proposal to reopen the Strait of Hormuz and end fighting. This increase in oil prices poses significant risks for India's economy, as the country is the world's third-largest crude importer.

Additionally, geopolitical uncertainties and weak global cues have further contributed to the market's decline. Foreign Institutional Investors (FIIs) continued their selling spree, offloading equities worth Rs 3,696 crore for a second consecutive session. The rupee also depreciated by 20 paise against the US dollar.

While profit booking emerged at higher levels as investors locked in gains after markets rose in the previous session, the overall sentiment remains pessimistic. G Chokkalingam, founder and head of research at Equinomics Research, noted that higher oil prices, rising inflation, and lack of adequate liquidity remain major concerns for domestic markets.

The Nifty must defend 23,000 to preserve the possibility of a mean-reversion bounce, according to Hariselvan Radhakrishnan, Founder & CEO of HST Wealth. A breakdown could extend the decline toward 22,600-22,580, where the 200-week SMA is positioned.