The wave of selling gripped the Indian stock market during Tuesday's trade, September 15, dragging the benchmark indices lower by around 1%, as escalating tensions in the Middle East kept crude oil prices elevated, fuelling inflation concerns and strengthening expectations of central bank rate hikes.
Markets began the session on a weak note, tracking losses on Wall Street, and selling pressure persisted through the close, leaving little room for the bulls to stage a recovery. Adding to the cautious sentiment, a sell-off in US Treasuries strengthened the case for a US Federal Reserve rate hike, keeping investors on edge ahead of the central bank's policy decision.
Indian stock market todayThe Nifty 50 closed 1% lower at 23,172, breaking below the key support level of 23,300. The Sensex also remained under pressure, falling 0.82% from Friday's close to settle at 74,171. The sell-off was even more pronounced in the broader market, with the Nifty Midcap 100 falling 2.07% and the Nifty Smallcap 100 declining 2.53%.
Barring IT, all major sectoral indices ended in the red, reflecting broad-based selling pressure across the market. Realty, chemicals, cement, metals, media, consumer durables and PSU stocks all closed with losses of more than 2%. The IT index, however, bucked the trend and gained 2.32%, as hopes resurfaced that software stocks could attract renewed demand after leading AI companies called for a slower pace of development.
Anthropic CEO Dario Amodei called for a slowdown in the development of advanced AI, while OpenAI CEO Sam Altman backed the proposal. The comments have raised expectations that a slower pace of AI development could prompt investors to reassess the outlook for traditional software and IT services companies.
Crude oil climbs as Middle East tensions threaten suppliesTurning to the commodity market, oil prices continued to climb as fighting in the Middle East disrupted global crude flows. An important Saudi oil pipeline will remain largely out of service for weeks following an attack last week, The Associated Press reported, citing two regional officials.
The pipeline provides Saudi Arabia with an alternative route to shift oil exports to the Red Sea, helping it avoid the Persian Gulf and the Strait of Hormuz, where Iranian attacks have disrupted the movement of oil tankers. Brent crude, the international benchmark, rose $2.75 to $108.43 a barrel, compared with around $72 a barrel before the start of the war in Iran in late February.
US West Texas Intermediate crude gained $2.81 to $104.20 a barrel. Meanwhile, Iran-backed forces have reportedly seized the strategic Perim Island in the Bab el-Mandeb Strait after taking the port city of Mokha on Yemen's western coast. The developments have added to concerns over further disruptions to critical oil supply and shipping routes, keeping pressure on global energy markets.(more to come)