The benchmark equity indices Sensex and Nifty extended decline on Wednesday, weighed down by higher crude oil prices and persistent geopolitical uncertainties, which dented investor sentiment.
At around 10:45 a.m., the Sensex was down 345.13 points or 0.45 percent at 76,890.33.
The Nifty declined to 24,044.50, down 110.40 points or 0.46 percent. Nifty has declined for the last six sessions, losing nearly 2 percent during the period.
All major Nifty sectoral indices declined, barring auto, IT and pharma. The broader Nifty Smallcap 100 and Nifty Midcap 100 indices fell 0.33 percent and 0.21 percent, respectively.
Financial stocks, which have a high weightage in the indices, fell 0.5 percent. The IT index gained 0.8 percent after declining 4 percent in the last three sessions.
1) Rising crude prices: Brent crude, the global oil benchmark, traded 0.67 percent higher at USD 91.63 per barrel. The expiry of the temporary 60-day US-Iran ceasefire without any meaningful diplomatic breakthrough has renewed concerns over a prolonged disruption to energy supplies, driving crude oil prices higher.
"The expiry of the temporary 60-day US-Iran ceasefire without any meaningful diplomatic breakthrough has renewed concerns over a prolonged disruption to energy supplies, driving crude oil prices higher and pushing long-term US Treasury yields to multi-year highs. The combination has triggered a broad risk-off mood across global financial markets," Ponmudi R, CEO of Enrich Money, an online trading and wealth-tech firm, said.
2) Weak global cues: Asian markets traded lower, with South Korea's Kospi tanking 5.59 percent. Japan's Nikkei 225 and Shanghai's SSE Composite index were also trading lower. US markets ended lower on Tuesday. Wall Street futures were also trading up to 0.7 percent lower, indicating a weak start for US equities.
3) Geopolitical concerns: Iran threatened a "fully offensive" military posture as efforts to negotiate a permanent end to the war with the US have stalled, a senior Iranian official told Reuters on Monday, while Washington ruled out extending a temporary ceasefire agreement that has now expired.
4) Higher bond yields: Long-term borrowing costs in the United States, Germany and Japan are also dimming the appeal of emerging-market equities, as higher risk-free returns draw capital towards developed-market bonds and curb appetite for riskier assets.
"The ongoing mild weakness in the market is driven mainly by two factors: one, the rising crude prices, and two, appreciating bond yields globally. Crude prices have been responding to news from the Middle East for many months since the start of the war. Now, there is total uncertainty about the outcome of this conflict," VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said.
Bucking the broader trend,Prism Johnsongained 8.7 percent after the building materials company secured 10-year coal supply contracts worth Rs 70.49 crore annually from Eastern Coalfields and South Eastern Coalfields.
Indraprastha Gasand Mahanagar Gas gained 3.1 percent and 3.8 percent, respectively, following the government's incentives to city gas distributors to boost domestic connections of piped cooking gas
Anand James, Chief Market Strategist at Geojit Investments, said "While consecutive days of declines have raised the odds for a mean reversion upmove, deeper supports at 24060 and 23575 stands exposed now. We will look for a pull back above 24260 to play upsides aiming 24350 or 24540-666."
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latestBusiness News,Sensex, andNiftyupdates. ObtainPersonal Financeinsights, tax queries, and expert opinions onMoneycontrolor download theMoneycontrol Appto stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.