Mumbai (IANS) Indian stock markets fell steeply on Monday over a sharp rise in crude oil prices. The benchmark Brent crude futures rose above the $73 a barrel mark following reports that the US may end sanctions waivers it had granted to some importers of Iranian oil, including India and China, last year.
All the sectoral indices closed lower, except for the export-oriented IT sectors stock which rose as the rupee lost ground against the dollar. The 'India VIX' or the fear gauge also logged a 3-year-high, touching an intra-day high of 24.5 over uncertainty around the general election and high oil prices.
"Brent crude oil prices rose by 1.86 per cent, to 5 months high at $73.83 per barrel over US sanctions on Iran oil import. The US is planning to announce that buyers of Iran oil need to end imports soon or face sanctions themselves," said Anuj Gupta, DVP - Commodities and Currencies Research, Angel Broking.
"Due to this, we expect Brent crude oil price may test $78 to $80 per barrel. Iran is the second largest producer in OPEC group countries."
Sensex plunged by 495.10 points or 1.26 per cent to 38,645.18 and the Nifty declined by 158.35 points or 1.35 per cent to 11,594.45.
"Broad-based consolidation was witnessed today as investors are on a profit booking mood given weak global cues and general election. Additionally, concerns over the end of US waivers on oil imports from Iran has led to a rise in oil prices impacting India," said Vinod Nair, Head of Research, Geojit Financial Services.
"However, the downside for the market may be capped given better Q4 results so far and strong FIIs flows."
Dewan Housing Finance Ltd (DHFL) ended 10.91 per cent lower after rating agency CRISIL downgraded the credit rating of the company's commercial paper.
The stock price of the grounded Jet Airways hit a new low during the early trade on Monday as it slipped nearly 20 per cent to Rs 132.20 per share. However, it recovered significantly to end 5.67 per cent lower.
The index heavyweight Reliance Industries closed 2.76 per cent lower, dragging the benchmark indices down as the investors responded to the weakness in its petrochemical and refining business, despite its overall strong quarterly results for the last quarter of 2018-19.
Bharti Airtel, TCS, Infosys, NTPC and Power Grid were the only gainers on the Sensex.