New Delhi/Chandigarh, March 9: Domestic equity markets faced a severe downturn on Monday morning as benchmark indices collapsed in the opening session following a 25 percent surge in global crude oil prices. The BSE Sensex dropped 1,862.15 points to open at 77,056.75, while the Nifty 50 declined by 582.40 points, starting the day at 23,868.05.
The aggressive selling pressure follows reports of crude oil reaching 116 USD per barrel. Financial analysts stated that the spike, driven by ongoing conflict in Asia, has sparked immediate fears regarding inflationary pressures and the overall health of the national economy.
Market expert Ajay Bagga noted that the impact on the country’s fiscal health would be substantial. “The oil price hit to the Indian GDP, current account deficit and inflation will be huge given that India meets more than 85 per cent of its crude oil requirements from imports,” Bagga affirmed.
The surge is expected to translate into higher costs for daily commodities. Bagga maintained that retail price hikes for petrol and diesel are likely, following recent increases in cooking gas rates for both domestic and commercial users.
Sector-specific impacts are anticipated across industries that rely heavily on oil derivatives. Experts asserted that aviation, paints, automobiles, and chemicals will face significant strain. However, the current liquidity squeeze suggests a broader sell-off.
“Expect cuts in leading counters, even those not correlated to the oil price, including in gold and silver,” Bagga added, noting that the volatility is affecting even traditionally stable assets.
