Indian Markets Slide as Middle East Tensions, US Rate Concerns Weigh
Sensex and Nifty extend losses as higher crude prices and stronger US rate expectations pressure investor sentiment
NEW DELHI, Sept 7: Indian equity markets came under renewed pressure on Monday as escalating tensions in the Middle East, rising crude oil prices and growing expectations of a US interest rate hike weighed on investor sentiment.
The Nifty 50 fell 0.25 per cent to close at 23,838.65, while the BSE Sensex declined 0.24 per cent to 76,335.07. The decline followed four consecutive weeks of losses for the benchmark indices.
Information technology stocks were among the biggest losers, with the sectoral index falling around 2 per cent. Investors remained concerned that higher US interest rates could weaken spending by American companies, an important source of revenue for Indian IT firms.
Broader markets also remained under pressure, with small and mid cap stocks declining amid concerns over elevated crude prices and geopolitical uncertainty.
Oil prices have become a major concern for Indian investors as tensions involving the United States and Iran have intensified. Higher energy costs could increase inflationary pressures and widen India’s import bill.
Foreign investors have also turned cautious. Foreign portfolio investors withdrew around Rs 7,443 crore from Indian equities during the first week of September, reversing the buying trend seen over the previous two months. Rising crude prices, US bond yields and a stronger dollar contributed to the change in sentiment.
Market participants are now expected to closely monitor upcoming US inflation data and developments in the Middle East for further indications about global interest rates and risk appetite.
Analysts said continued volatility could remain a feature of Indian markets as investors assess the impact of higher energy prices, currency movements and changing expectations surrounding US monetary policy.
