As a result of the West Asia war pushing crude prices higher and causing a flight to safe havens, benchmark indices, the Sensex and Nifty, plummeted more than 1.2% on March 2.
The BSE Sensex fell 1.29% to 80,238.85, the lowest level in six months, while the Nifty 50 fell 1.24% to a one-month low of 24,865.70. But ahead of a market break due to Holi, markets saw a slight comeback after plunging as much as 2% the day before.
Losses were recorded in 14 of the 16 major industries. The larger mid-caps and small-caps saw 1.8% and 1.6% declines, respectively.
Rising crude oil prices caused the stocks of oil marketing firms, paint and tire manufacturers, aviation companies, and chemical manufacturers to plummet. On Monday, the ICE Brent Crude Oil May futures reached a one-month high of $82.37 a barrel. The May Brent Crude Oil Futures were up 8% to $78.71 per barrel.
The U.S. and Israel strikes on Iran increased the likelihood of a protracted battle in the Middle East, which caused the Indian rupee to weaken against the dollar and government bond yields to increase. MSCI’s measure of Asia-Pacific stocks dropped 1.5% on Monday, while Asian currencies declined 0.2% to 0.6%. At 97.9, the dollar index was down 0.2%.
On Friday, February 27, foreign investors (FIIs/FPIs) sold Rs 7,536.4 crore worth of Indian stocks. At the same time, provisional exchange data shows that domestic institutional investors (DIIs) net purchased shares valued at Rs 12,292.8 crore. The volatility index, India VIX, increased by more than 25% to reach a nine-month high of 17.13.
