Stock markets drop in early trade on surging oil prices, war escalation fears

Mumbai: On Monday, April 6, the Indian stock market experienced a sharp decline in early trade as crude oil prices surged amid heightened fears of further escalation in the West Asia conflict. The benchmark indices, Sensex and Nifty, fell significantly, with the 30-share BSE Sensex dropping 270.13 points to 73,049.42 and the 50-share NSE Nifty plunging 93.60 points to 22,619.50. Later in the day, the BSE benchmark traded 509.77 points lower at 72,822.60, and the Nifty quoted 141.20 points down at 22,571.90.

The decline was driven by a combination of rising crude oil prices and relentless foreign fund outflows, which dampened market sentiment. Among the major laggards in the 30-Sensex firms were Reliance Industries, Kotak Mahindra Bank, Sun Pharma, InterGlobe Aviation, Adani Ports, and ICICI Bank. On the positive side, Trent, Titan, Tech Mahindra, and Bharat Electronics managed to post gains.

The global oil benchmark, Brent crude, climbed 0.74 percent to USD 109.8 per barrel, reflecting the market's concerns over the ongoing conflict. Foreign Institutional Investors (FIIs) offloaded equities worth Rs 9,931.13 crore on Thursday, according to exchange data, while Domestic Institutional Investors (DIIs) bought stocks worth Rs 7,208.41 crore.

VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, highlighted that the uncertainty surrounding the West Asia conflict would likely keep the market volatile, with potential for further escalation in the coming days. He noted that the market would be closely monitoring the response of crude prices to war-related events.

In Asian markets, South Korea's benchmark Kospi and Japan's Nikkei 225 index both traded higher. US markets were closed on Friday for Good Friday. Hariprasad K, Research Analyst and Founder of Livelong Wealth, stated that comments from US President Donald Trump about potential escalation if key supply routes were not restored had kept risk appetite in check. He emphasized that crude oil and global uncertainty remained dominant drivers for markets.

The Indian equity markets were closed, leaving investors cautiously watching the situation unfold, as the geopolitical tensions and oil prices continued to weigh heavily on the market's performance.