Mumbai: Indian stock markets came under pressure on Friday after a sharp two-day rally, as investors turned cautious due to profit booking, rising crude oil prices, weak global markets and geopolitical tensions. The BSE Sensex ended 160.73 points lower at 75,237.99, while the Nifty 50 fell 46.10 points to close at 23,643.50.
Profit Booking After Strong Rally
Markets had rallied sharply in the previous two sessions. On Thursday, the Sensex had gained nearly 790 points, while the Nifty had jumped 277 points. After such a strong rise, many investors decided to book profits at higher levels, leading to selling pressure across sectors.
Experts said some consolidation after a big rally is normal in the market.
Crude Oil Prices Hit Markets
A major reason behind the market weakness was the sharp jump in crude oil prices. Brent crude futures climbed close to 2% and traded above $109 per barrel, while US WTI crude also moved above $102 per barrel.
India imports a large part of its crude oil needs, so rising oil prices increase worries over inflation, higher import bills and pressure on the rupee.
Oil marketing company stocks remained under pressure. Shares of companies like Bharat Petroleum and Hindustan Petroleum fell between 1.8 percent and 3 percent.
Weak Global Cues Add Pressure
Asian markets also traded weak. Japan’s Nikkei, South Korea’s Kospi and Hong Kong’s Hang Seng closed lower. US futures were also under pressure, with Nasdaq futures falling sharply.
Investors globally remained worried about slowing economic recovery and rising tensions in West Asia.
Rupee Hits Record Low
The Indian rupee weakened to around 96 against the US dollar, its lowest-ever level. Forex traders said higher crude oil prices, a stronger dollar and foreign investor demand for dollars added pressure on the Indian currency.
A weaker rupee can reduce foreign investor confidence in Indian markets.
Geopolitical Tensions Keep Investors Nervous
Tensions in West Asia further hurt market sentiment. Reports said Iranian authorities seized a ship near the UAE, while an Indian cargo vessel travelling toward the UAE reportedly sank near Oman.
At the same time, the US rejected Iran’s peace proposal, increasing worries over regional stability and global oil supply.
