Stock markets drop in early trade as oil prices, US–Iran conflict weigh on sentiment

Equity benchmark indices tumbled in early trade on Tuesday amid rising crude oil prices as uncertainty surrounding the West Asia conflict clouded markets' confidence. Unabated foreign fund outflows also dragged the markets lower. The 30-share BSE Sensex fell by 525.44 points to 75,489.84 in early trade. The 50-share NSE Nifty dropped 164.5 points to 23,651.35. From the 30-Sensex firms, Tata Consultancy Services, Infosys, Tech Mahindra, HCL Tech, Adani Ports and Bajaj Finserv were among the major laggards. Bharti Airtel and NTPC were the winners.

Brent crude, the global oil benchmark, traded 0.93 per cent higher at USD 105.2 per barrel. "The ongoing US–Iran conflict continues to weigh on global sentiment, keeping risk appetite subdued across financial markets and resulting in heightened headline-driven volatility across equities and commodities. Investors remain wary as uncertainty surrounding the duration and potential outcome of the conflict continues to cloud market confidence," Ponmudi R, CEO of Enrich Money, an online trading and wealth-tech firm, said. US President Donald Trump on Monday said the ceasefire with Iran was at its "weakest" and on "massive life support", a day after he rejected Tehran’s proposal to end the months-long war as "totally unacceptable". "It is at its weakest… After reading that piece of garbage they sent us... It's on life support, massive life support," Trump told reporters at the Oval Office in response to a question on the ceasefire with Iran in the wake of the rejection of the peace proposal. Foreign Institutional Investors (FIIs) offloaded equities worth Rs 8,437.56 crore on Monday, according to exchange data. In Asian markets, South Korea's benchmark Kospi and Shanghai's SSE Composite index were trading lower, while Japan's benchmark Nikkei 225 index and Hong Kong's Hang Seng index quoted higher. US markets ended in positive territory on Monday. On Monday, the BSE benchmark tanked 1,312.91 points or 1.70 per cent to settle at 76,015.28. The Nifty dropped 360.30 points or 1.49 per cent to end at 23,815.85.