MUMBAI: Thanks to the failed West Asia peace talks in Pakistan over the weekend, there was elevated volatility across global markets on Monday with most major stock indices sliding, crude oil spiking above the $100/barrel mark, and precious metals slipping into the red as inflation fears returned. On Dalal Street, sensex opened deep in the red -down about 1,600 points or 2.1%-but clawed back through the session to close 703 points (0.9%) lower. The day’s selling was led by foreign funds with net outflow at Rs 1,983 crore, BSE data showed. In contrast, domestic funds were net buyers at Rs 2,432 crore. According to Vinod Nair of Geojit Investments, markets continue to derive limited support from last week’s ceasefire framework, which remains intact for now and is encouraging selective buying interest along with a buy-on-dips approach. “This (buying emerged) despite an initial negative reaction to the breakdown of the US-Iran peace talks and the announcement of a US naval blockade in the Strait of Hormuz, which pushed crude prices above $100 (level). Elevated oil prices are raising concerns around inflation, currency stability, and broader macro balances, weighing on overall sentiment.” Market players feel the ensuing quarterly earnings season could lead to stock-specific trading, although risks emerging from a fluid geopolitical scenario are pushing investors to remain cautious.
The day’s session left investors poorer by about Rs 2.1 lakh crore with BSE’s market capitalisation now at Rs 449.1 lakh crore. In the bullion market, gold and silver showed a bearish trend as the US dollar showed strength on the back of oil-price-led inflation spike. Despite the weakness of the rupee against dollar, gold futures for June expiry on MCX traded about 0.7% lower at Rs 1.5 lakh/10 gram while silver for May delivery was down 2.2% at Rs 2.4 lakh/kg.
