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Stock market today: Sensex, Nifty 50 fall; geopolitical concerns, spike in crude oil prices weigh on sentiment

  • Nishadil
  • January 02, 2024
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  • 1 minutes read
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Stock market today: Sensex, Nifty 50 fall; geopolitical concerns, spike in crude oil prices weigh on sentiment

Stock market today: Domestic equity benchmarks the Sensex and the Nifty 50 ended in negative territory on Tuesday, January 2, on concerns over escalating geopolitical tensions and a significant jump in crude oil prices. Additionally, the market's high valuation appears to have led investors to secure profits before the onset of December quarter earnings.

According to media reports, US helicopters repelled an attack by Iran backed Houthi militants on a Maersk container vessel in the Red Sea. "The naval battle underlines the risk of a regional escalation in fighting as Israel continues with its relentless bombing campaign following a Hamas surprise cross border attack on Israeli towns on October 7.

The Red Sea is the entry point for ships using the Suez Canal, which handles about 12 per cent of global trade and is vital for the movement of goods between Asia and Europe," reported Reuters. The conflict in the Red Sea boosted oil prices as the chances of supply disruption grew. Crude oil benchmark Brent Crude traded 2.34 per cent higher near the $79 per barrel mark around 3:40 pm.

The sharp surge in crude oil prices poses a threat to the Indian economy and could negatively impact stock market sentiment, given India's status as one of the leading importers of crude oil. Apart from this, sharp gains in the key equity indices in the last two months have raised market valuation.

As most positives are already factored in the market, investors took money off the table ahead of the December quarter earnings which is starting next week. IT companies are expected to report softer numbers for Q3FY24. Sensex closed 379 points, or 0.53 per cent, lower at 71,892.48 while the Nifty 50 settled at 21,665.80, down 76 points, or 0.35 per cent.

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