Nifty, Sensex Drop 0.6% On Fresh US-Iran Tensions; Crude Oil Prices Rise Above $100 Barrel Mark

Indian stock markets fell on May 8 tracking slump in global markets on renewed tensions in West Asia. Crude oil prices rose back up beyond the $100 per barrel mark which also triggered a fall in markets.

Both the benchmark Nifty and Sensex indices fell over 0.6 per cent in early trade tracking the negative cues. The Nifty was trading at 24,174.00 while the Sensex was trading down at 77,360.52 at the time of writing.

Fresh attacks between US and Iran threatened to derail peace talks between the two countries US said that they intercepted Iranian attacks and carried out defensive action while missile destroyers were deployed across the Strait of Hormuz, and emphasised that the US does not intend to escalate tensions any further. US is meanwhile awaiting Iran’s response to the updated proposal to reopen the Strait and end the over two month-long conflict.  Overnight, US stock markets also fell as the International Energy Agency (IEA) warned that the ongoing war was disrupting around 14 million barrels of the global oil supply per day and said that any post-conflict production would also take time and likely proceed gradually.

The Indian rupee broke the two-day gaining streak and fell to 94.54 against the US dollar due to rise in crude oil prices. The dollar index recovered to 98.24 against its major peers.

Banks and financial services sector led losses in the market. Within sectoral indices, Nifty Private Bank fell the most, down around 1 per cent, while Nifty PSU Bank was down nearly 0.7 per cent. Oil and gas companies also slumped, with the Nifty Oil & Gas index falling 0.9 per cent. Meanwhile, IT and Telecom stocks outperformed broader market sentiment. The Nifty IT index was up nearly 0.7 per cent. Healthcare and pharmaceutical companies also rose during the session, with the Nifty Midsmall healthcare sector up 0.7 per cent.

(This is a developing story. More updates to follow)