Sensex, Nifty decline for third day on weak global trends, soaring crude oil prices

BSE Sensex fell 231.62 points or 0.35% to settle at 65,397.62. During the day, it plunged 320.63 points or 0.48% to 65,308.61. File

Benchmark stock indices Sensex and Nifty fell for the third day running on Friday due to weak trends in global markets and soaring crude oil prices.

Foreign fund outflows also weighed on investor sentiments amid strengthening U.S. bond yields which are nearing 5% for the first time since 2007.

The 30-share BSE Sensex fell 231.62 points or 0.35% to settle at 65,397.62. During the day, it plunged 320.63 points or 0.48% to 65,308.61.

Falling for a third straight day, the Nifty declined 82.05 points or 0.42% to 19,542.65.

In three sessions to Friday, Sensex dropped 1,030 points while Nifty tanked 268 points due to selling pressure.

Among the Sensex firms, ITC, Tata Steel, Hindustan Unilever, State Bank of India, JSW Steel and Power Grid were the major laggards.

Kotak Mahindra Bank, IndusInd Bank, Tata Consultancy Services and NTPC were the major gainers.

Vinod Nair, Head of Research at Geojit Financial Services said, “The added uncertainty stemming from West Asia tensions and the imperative for continued monetary tightening emphasized by the U.S. Fed Chair created a layer of volatility in the market.

“While heightened oil prices and elevated U.S. bond yields will impact the domestic monetary environment and operational metrics of the companies.”

In Asian markets, Seoul, Tokyo, Shanghai and Hong Kong ended in the negative territory. European markets were trading lower. The U.S. markets ended lower on Thursday.

Global oil benchmark Brent crude jumped 1.14% to $93.40 a barrel.

“Rising rates are intuitively not positive for equity markets. With U.S. government bonds giving 5% dollar returns, the ask rate for equities goes up significantly if one were to adjust for risk premium and currency hedging,” Alok Agarwal, Portfolio Manager at Alchemy Capital Management said.

The yield on the 10-year Treasury touched 4.99%, up from 4.91% late Wednesday, before paring its gain to 4.98%. Early Friday, the 10-year Treasury yield was 4.94%.

Brent crude, the international standard, picked up $1.29 to $93.67 per barrel as escalating Hamas-Israel conflict fuelled supply concerns.

Foreign Institutional Investors (FIIs) offloaded equities worth ₹1,093.47 crore on Thursday, according to exchange data.

The BSE benchmark fell 247.78 points or 0.38% to settle at 65,629.24 on Thursday. The Nifty declined 46.40 points or 0.24 per cent to 19,624.70.