Summary of this article
Sensex, Nifty fell as crude oil climbed above $90 per barrel
Banking and financial stocks led losses; midcap and smallcap indices outperformed
Rupee weakened as higher oil prices and geopolitical tensions hurt sentiment
Stock Market Today: Benchmark equity indices opened sharply lower on July 20 as escalating tensions in the US-Iran war drove crude oil prices above the $90-a-barrel mark, denting investor sentiment.
The sell-off was led by banking and financial stocks. HDFC Bank and Axis Bank fell more that 5 per cent each, and Kotak Mahindra Bank declined nearly 3 per cent. Other financial stocks, including Jio Financial Services, Shriram Finance, Bajaj Finance, also traded lower, weighing on the benchmark indices. Nifty Bank index, which tracks 14 banking sector stocks, was down by more than 1.60 per cent. Nifty Private Bank was the top sectoral loser, falling 2.76 per cent, while the Nifty PSU Bank was up by nearly 1 per cent.
Following private banks and financial services stocks, auto and realty were also down. Nifty Metal, Nifty Pharma, Nifty Healthcare, Nifty PSU Bank, and Nifty Oil & Gas, on the other hand, emerged as gainers.
Midcaps and smallcaps, on the contrary, outperformed benchmarks, with the Nifty Midcap 100 and Nifty Smallcap 100 rising nearly 0.50 per cent, as of the time of writing.
Crude Oil Prices Jump After US-Iran War Escalations
Escalating tensions in the West Asia kept investors cautious, leading to s surge in crude oil prices.
Brent crude climbed 2.6 per cent to $90.40 a barrel, its highest level since June 11, while US West Texas Intermediate (WTI) crude gained 2.3 per cent to $84.39 a barrel. Brent has now rallied nearly 16 per cent over the past week as fears of supply disruptions intensified.
The spike in oil prices came after the US launched a ninth straight day of strikes on Iran, prompting fresh retaliatory attacks from Tehran. At the same time, reports of disruptions to shipping through the Strait of Hormuz, a key route for global oil trade, raised supply side concerns. Higher crude prices have also renewed worries about inflation, as a sustained rise in oil costs could increase input costs for businesses and delay interest rate cuts by central banks.
Asian Markets Mixed
Asian markets showed a mixed trend this morning as investors assessed the impact of rising crude oil prices, escalating tensions in West Asia and lingering concerns over elevated valuations in technology stocks.
South Korean equities extended last week's losses, with the country's chip-heavy benchmark falling another 4 per cent after plunging nearly 8 per cent in the previous week. On the other hand, Chinese CSI 300 index bucked the broader regional trend, gaining 1.55 per cent. Japanese markets were closed for a public holiday.
Rupee Weakens Further
The rupee weakened 12 paise to 96.42 against the US dollar in early trade, pressured by a jump in crude oil prices and increased demand for the greenback amid escalating tensions in West Asia.
The rupee opened at 96.53 against the dollar, compared with its previous close of 96.30, before recovering some losses to trade at 96.42. Foreign fund outflows also weighed on the domestic currency.
Meanwhile, the US dollar index, which measures the US currency against a basket of six major currencies, was marginally lower at 100.54, down 0.05 per cent.
