Fragile ceasefire leaves Dalal-Street on edge, sensex falls 1.5k pts

MUMBAI: As tensions prevailing in West Asia rattled global markets, sending crude prices soaring and the Indian rupee to new lows, sensex lost another 1,456 points (1.9%) to close below the 75K mark, at 74,559 points.

In two sessions this week, sensex has lost nearly 2,800 points or over 3% while in four sessions since May 7, the loss was almost 3,400 points or 4.4%. Investors' wealth, measured by BSE's market capitalisation, since hitting a recent high of Rs 475 lakh crore on Thursday, May 7, is now down by Rs 19 lakh crore at about Rs 456 lakh crore.

Although the day's selling was strong and across-the-board, a relatively positive event was the comparatively lower net foreign fund outflow, at Rs 1,959 crore, BSE data showed. In contrast, on Monday although sensex had lost 1.7%, the net foreign fund outflow was Rs 8,438 crore.

According to Siddhartha Khemka of Motilal Oswal Financial Services, domestic markets extended losses for the fourth consecutive session as lack of progress in the US-Iran negotiations continued to create nervousness across global markets.

"Escalating tensions in West Asia have heightened fears of a prolonged geopolitical conflict, keeping investors risk-averse and triggering sustained selling across financial markets."

Fresh tensions in West Asia also lifted crude oil prices to over the $105/barrel level, leading to continuous foreign fund outflows, Khemka said. "Unless there is any meaningful progress in negotiations volatility and weakness in domestic equities are likely to persist."

On Tuesday, of the 30 sensex stocks, 29 closed in the red, with SBI-up only marginally-the only exception. Of the index constituents, HDFC Bank, ICICI Bank, Reliance and Infosys contributed most to the day's loss, data showed.

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